In the instant case, Jubiliant Engineering (the Appellant) was 100% Export Oriented Units (EOU) engaged in manufacturing of valve assemblies falling under the Chapter 8481 of the Central Excise Tariff Act, 1985. Though the Appellant was not required to pay duty on the export goods, the Appellant exported the goods on payment of duty during the period from November 24, 2004 to January 13, 2005 by debiting their Cenvat Credit Account.
Subsequently, the Appellant filed Rebate claim before the Central Excise Authorities. Thereafter, the Appellant vide letter dated May 5, 2005 requested the Department for cancellation of the Rebate claim. Since no reply was received from the Department, the Appellant availed suo motto re-credit of Rs. 15,39,027/- in their Cenvat Credit Account.
The Adjudicating Authority confirmed demand on the Appellant along with interest and penalty of Rs. 1,00,000/- under Rule 15 of the Cenvat Credit Rules, 2004 on the ground that there is no provision to take suo-motto re-credit on the duty paid on exported goods. The Appellant have the option either to claim Refund or file Rebate claim. The Adjudicating Authority relied upon the Tribunal’s Larger Bench decision in the case of BDH Industries Ltd. Vs. CCE, Mumbai [2008 (229) ELT 364 (Tri.-LB)]
On appeal being filed to the Ld. Commissioner (Appeals), the Ld. Commissioner (Appeals) upheld the Order of the Adjudicating Authority. Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Chennai contending that they have exported the goods on payment of duty
and filed Rebate claim and on their own they have cancelled the Rebate claim and availed re-credit in their Cenvat Credit Account. It was further submitted that there is no bar on EOU for availing Cenvat credit.
The Hon’ble CESTAT, Chennai relying upon the decision of the Hon’ble Division Bench in Appellant’s own case vide Final Order 1280 1284/2008 dated July 16, 2008, held that the Appellant is eligible to avail Cenvat credit on the inputs. Further, once the Appellant’s Rebate claim is cancelled, they are entitled to take re-credit in their Cenvat Credit Account.