Kancor Ingredients Ltd Vs Commissioner (CESTAT Allahabad)
Refund of accumulated Cenvat Credit on export of goods cannot be denied even if export was not under bond
In the case of Kancor Ingredients Ltd vs Commissioner (CESTAT Allahabad), the issue of refunding accumulated Cenvat Credit for exported goods without a bond is examined. The appellant, Kancor Ingredients Ltd, challenged the rejection of their refund claim by the Commissioner (Appeals) CGST, Noida.
Kancor Ingredients Ltd, engaged in manufacturing goods exempted from Central Excise Duty, filed a refund claim for accumulated Cenvat Credit attributable to the export of goods. Despite the absence of a bond during export, the company argued that procedural lapses shouldn’t negate the substantive benefit of the refund. The learned Chartered Accountant cited precedents and emphasized the policy of zero-rated exports.
The departmental representative justified the rejection, citing Rule 6(6)(v) of CCR, 2004, which allows Cenvat Credit only for exports under bond. However, the Tribunal noted that the appellant’s export was not disputed, and denying the refund solely for procedural reasons would contradict the government’s export policy.
Citing various cases, including Jolly Board Ltd vs CCE and Commissioner of Central Excise vs Drish Shoes Ltd, the Tribunal ruled in favor of Kancor Ingredients Ltd. It emphasized that the intent of the legislation is to avoid exporting taxes and confirmed that procedural lapses, like the absence of a bond, shouldn’t hinder refund claims.
