CESTAT, BANGALORE BENCH
Commissioner of Customs, Bangalore
FINAL ORDER NO. 298 OF 2012
APPEAL NO. E/1308 OF 2010
MAY 11, 2012
1. This is an appeal against order of the Commissioner No.42/2010 dated 24.3.2010. Heard both sides.
2. The relevant facts in brief are that the appellants were working as a 100% EOU and with the permission of the Development Commissioner de-bonded the unit with effect from 19.4.2007. It is claimed that they had accumulated CENVAT credit at the time of debonding and that the accumulation was due to export of the goods. They filed the refund claim under Rule 5 of the CENVAT Credit Rules on 9.4.2008. The claim was for an amount of Rs.7,40,720/- being credit taken by them relating to the period April 2005 to March 2007. A show-cause notice dated 9.6.2008 was issued proposing to reject the refund claim as time barred as the refund related to period from 1.4.2005 to 31.3.2007 and the claim having been received on 9.4.2008. The party contested the proposal and submitted that the claim under Rule 5 is not governed by time limit under Section 11 B of the Central Excise Act. The original authority rejected the claim. The Commissioner (Appeals) has upheld the order of the original authority.
3. Learned advocate for the appellant relying on the decision of the Tribunal in the case of GTN Engineering (I) Ltd. v. CCE 2010 (259) ELT 625 (Trib. – Chennai) submits that the time limit prescribed under Section 11B does not apply to credit accumulated due to export and claimed as refund under Rule 5.
4. Learned Superintendent (AR) submits that the refund has been made after the appellant has de-bonded from being a 100% EOU and original authority has merely held that claim to be time barred and he has not gone into other aspects of the refund claim.
5.1 I have carefully considered the submissions from both sides and perused the records. Undisputedly the refund is of accumulated credit of CENVAT credit by the appellants and claim has been preferred under Rule 5. Tribunal in the case of GTN Engineering (I) Ltd. (supra) has held that time limit prescribed under Section 11B is not applicable in such case. The relevant portion of the decision of the Tribunal is reproduced below:
“5.1 I have carefully considered the submissions from both sides. The orders of the original authority clearly acknowledge the legal position that the appellants are eligible for refund of CENVAT credit in respect of inputs contained in goods exported as stipulated under Rule 5 of the CENVAT Credit Rules. The claims have been rejected on the ground that the appellants have not produced the relevant documents to the effect that the claim in respect of each quarter is corresponding to the credit involved in respect of the inputs contained in the goods exported during that quarter. The fact remains that while admitting that the appellants have exported goods during the six quarters, the entire claims for refund of CENVAT credit have been denied on the ground that the documents have not been produced. This is obviously erroneous.
5.2 In addition, in respect of three quarters, claims have been rejected by the original authority on the ground of time-bar also. The Commissioner (Appeals) upholding the order of the original authority also held that all the six claims are time-barred. Regarding the submission of learned SDR that Section 11B is applicable to refund of CENVAT credit under Rule 5, it is to be noticed that the credit accumulated in CENVAT credit account is not duty paid by the exporter. Only when the credit is debited towards duty payable it will amount to payment of duty. Section 11B clearly refers to refund of duty paid. The appellants are not claiming refund of any duty paid by them. They are claiming refund of CENVAT credit already taken by them which could not be utilized as they have accumulated due to exports as specifically provided under Rule 5. The issue whether the time-limit prescribed under Section 11B in respect of claim for refund of CENVAT credit under Rule 5 is applicable has been considered by the Tribunal in the case of Swagat Synthetics Ltd. v. CCE 2007 (220) ELT 949 (Trib. – Ahd.) and it was held that credit lying in RG23A account accumulated arising out of export is akin to credit in the PLA and the time-limit shall not apply. The said decision has been upheld by the Hon’ble High Court of Gujarat. Therefore, the findings of the original authority that the three claims are hit by time-bar and the decision of the Commissioner (Appeals) holding that all the six claims are hit by time-bar are erroneous.
5.3 I also notice that the stipulation in Notification No. 5/2006 that the claim for refund of CENVAT credit relating to export should be made on a quarter basis is more for administrative convenience and this is to discourage the exporters to prefer too many claims leading to voluminous work at the divisional level. This does not specify any time limit for claiming the refund of credit. However, the refund of CENVAT credit can be allowed only after the export has taken place as rightly contended by the learned SDR. In other words, the refund claimed in any quarter should relate to CENVAT credit on inputs contained in goods exported during that quarter or earlier quarters and not in respect of goods to be exported.”
5.2 In view of the above, the ground on which the refund claim has been rejected is not sustainable. Further, it is noticed that the correctness of the amount and whether the entire amount relates to credit accumulated due to export has not been gone into by the lower authorities. Therefore after holding that the time limit under Section 11 B is not applicable, the matter is remanded to the original authority for considering the refund claim afresh.
6. The appeal is disposed of as above.