HIGH COURT OF KARNATAKA
Commissioner of Central Excise
Motherson Sumi Electric Wires
N. KUMAR AND RAVI MALIMATH, JJ.
CEA NOS. 27 TO 31 OF 2010
April 12, 2011
N. Kumar, J.
Sri Harish, the learned counsel files power for the respondent, in all these cases.
2. These appeals are preferred by the revenue against the order of the Tribunal upholding the order of the appellate authority allowing refund of Cenvat credit in terms of Rule 5 of Cenvat Credit Rules, read with Notification 11/2002.
3. The assesses are manufacturers of PVC Insulated wires. They availed credit on the inputs received and claimed that they have utilised it in the manufacture of PVC Insulated Wires which are cleared for export. They filed five refund claims for the period from April, 2005 to August, 2006. The original authority rejected the refund claims on the ground that the assessees had not fulfilled the conditions of Rule 5 of Cenvat Credit Rules, 2002, read with Notification No.ll/2.005-CE(NT) as amended. Aggrieved by the same the assessees preferred appeals before the Commissioner of Appeals. The Commissioner allowed the appeals and held that the asseseees were not in a position to utilise the credit availed on inputs used in the manufacture of goods which were exported under bond, which is getting accumulated from time to time. It is for the said reasons that Rule 5 of the Cenvat Credit Rules 2004 provides for sanction of refund in cash in respect of goods exported under bond/letter of undertaking. In the present case, the assessees have fulfilled all the conditions of Rule 5 of the Cenvat Credit Rules read with Notification No.ll/2002-CE(NT) dated 1-3-2002 as amended. He also held that it is not necessary for the assessees to prove that duty paid on input is used in the manufacture of the very product for which it was exported and thus he set aside the order of the assessing authority and granted the benefit. Aggrieved by the same, the revenue preferred an appeal.
4. The Tribunal on consideration of the relevant provisions of the law, the Judgments on the point held that it is not in dispute that the assessees used the inputs and have exported the impugned goods and the refund is only in respect of input credit attributable to the inputs utilized in the exported goods. It is not necessary to prove one-to-one correlation of inputs with that of exported goods. The assessees were not in a position to utilize the credit availed on inputs used in the manufacture of goods which were exported under bond and which were getting accumulated from time to time. In those circumstances, when once the appellate authority correctly applied Rule 5 and granted the refund, therefore they declined to interfere with the well considered order passed by the appellate authority. Against the said order the present appeal is filed.
5. We have heard the learned counsel appearing for the parties.
6. The facts are not in dispute. The duty paid inputs are used in the manufacture of finished products which are exported. It is also not in dispute that the assessees have complied with Rule 5 of the Cenvat Credit Rules, 2004. Therefore, they are in law entitled to refund of the unutilized Cenvat Credit in their account. That is precisely what has been held by both the appellate authorities. No substantial question of law arises for consideration in these appeals. Accordingly, there is no merit in these appeals. The appeals are dismissed.