Refund of unutilized input duty credit under Notification 85/87-C.E. not barred by six-month limitation from export date

Unutilized duty credit on inputs used in exported products under Notification No. 85/87-C.E. was treated as a refund mechanism for manufacturer-exporters who could not otherwise use the credit. The six-month limitation period from the date of export was held inapplicable because the notification contemplated refund claims not being filed more than once in a calendar year. The refund claim therefore could not be rejected merely as time-barred and had to be examined on merits under the notification.

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Issues: Whether the refund claim of unutilized duty credit on inputs used in exported products could be rejected as time-barred by applying a six-month limitation period, and whether the claim had to be considered under Notification No. 85/87-C.E. dated 01.03.1987.

Analysis: The refund arose under Notification No. 85/87-C.E. dated 01.03.1987, which permitted refund of unutilized input duty credit in relation to exported products and contemplated that such claims would not be submitted more than once in a calendar year. On that basis, the six-month period counted from the date of export was held not applicable. The notification was treated as providing a refund mechanism for cases where the manufacturer-exporter could not otherwise utilize the credit, so the claim could not be rejected merely because it was filed beyond six months from export.

Conclusion: The refund claim was not time-barred and had to be examined on merits under Notification No. 85/87-C.E. dated 01.03.1987.

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