Refund of unutilized CENVAT Credit U/R 5 of CCR, 2004 - Time limit under Section 11B is not applicable.

PJ/Case Laws/2011-12/1421

Case: COMMISSIONER OF CENTRAL EXCISE, CHENNAI Vs M/s FOXCONN INDIA PRIVATE LTD

Citation: 2011-TIOL-68-CESTAT-MAD

Issue: -Refund of unutilized CENVAT Credit under Rule 5 of CCR, 2004 - Time limit under Section 11B is not applicable.

Brief Facts: -Respondent is a 100% EOU and were exporting their final product, namely, cellular phones. They filed a letter dated 30.05.2008 claiming refund relating to CENVAT credit on goods exported during the period Jan. 08 to Mar. 08. The department sought certain additional particulars/documents, the respondent submitted the same on 16.06.2008.

The Original Authority held that the letter dated 16.06.2008 should be treated as the date of filing of refund claim as the same included relevant documents and the same was presented beyond 60 days as stipulated under Notification No. 40/2007-ST dated 17.09.2007. Accordingly, the Original Authority rejected the refund claim.

In appeal, the Commissioner (Appeals) set aside the order of the Original Authority and allowed the refund claim. The Revenue filed appeal against the said Order before Tribunal.

Appellant’s Contention: - Revenue submitted that the refund of unutilized credit under Rule 5 of the CENVAT Credit Rules, 2004 is governed by Notification No. 5/2006-CE(NT) dated 14.03.2006. They also submitted that detailed guidelines have been issued by the Board vide Circular No. 120/1/2010-ST dated 19-01.2010 regarding the manner of claiming the refunds. Though the guidelines have been prescribed in 2010, the procedure envisaging the manner of satisfying that the refund relates to credit of duty relatable to inputs used in the products which were exported are relevant.

Respondent’s Contention: - Respondents submitted that there is no dispute about the credit being eligible on the input services used in the export products. There is also no dispute about the export of final products. It is settled that there is no time-limit involved in claiming refund under Rule 5 of CENVAT Credit Rules. In this regard, reliance was placed on the decision of the Tribunal in the case of Swagat Synthetics Ltd. Vs Commissioner of Central Excise, Surat [2007 (220) ELT 949 (Tri.-Ahmd.) which stands upheld by the High Court.

Reasoning of Judgment: - The Tribunal held that the issue whether the time-limit prescribed under Section 11B in respect of claim for refund of CENVAT credit under Rule 5 is applicable or not has been considered by the Tribunal in the case of Swagat Synthetics and it was held that credit lying in RG-23A account accumulated arising out of the export is akin to credit in the PLA and the time-limit shall not apply. The said decision has been upheld by the High Court of Gujarat. Therefore, the finding of the Original Authority that the claim is hit by time bar is erroneous. Consequently the decision of the Commissioner (Appeals) in setting aside the order of the Original Authority and allowing the appeal of the party with consequential relief cannot be faulted.

Decision: -Appeal rejected.

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