Refund limitation for duty-paid inputs in exported goods turned on co-relation evidence and the Section 11B explanation.

A refund claim for duty paid on inputs used in exported goods by a 100% EOU was examined under Section 11B of the Central Excise Act, 1944. The explanation to Section 11B, including the clause on excisable material used in the manufacture of exported goods, was relevant to the limitation issue and the correct relevant date. The record before the lower authorities did not adequately establish co-relation between the duty-paid inputs and the exported final products. The matter was therefore remanded for fresh adjudication, with opportunity to produce evidence on the use of the inputs in the exported goods.

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Issues: Whether the refund claim of duty paid on inputs used in the manufacture of exported goods by a 100% EOU was barred by limitation under Section 11B of the Central Excise Act, 1944, or was saved by the explanation relating to excisable material used in exported goods.

Analysis: The refund claim was for duty paid on enamelled wire used as inputs in transformers that were exported by the EOU. The claim was therefore of the kind contemplated by Section 11B of the Central Excise Act, 1944. The explanation to Section 11B, particularly the clause dealing with excisable material used in the manufacture of exported goods, was relevant to determining the correct relevant date for limitation. The authority also noted that the appellants had asserted their EOU status and export use of the inputs, but the factual record before the lower authorities did not adequately establish co-relation between the duty paid inputs and the exported final products.

Conclusion: The claim was not finally rejected as time-barred at this stage. The matter was remanded for fresh adjudication with opportunity to produce evidence on the use of the duty paid inputs in the exported goods.

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