Refund of unutilised Cenvat credit in export cases not barred by Section 11B limitation, subject to prescribed evidence

Refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, in a case of export of the entire production, was treated as governed by the special refund mechanism under the relevant notification and not by the limitation in Section 11B of the Central Excise Act, 1944. The Tribunal regarded Rule 5 and the notification as pari materia with the earlier refund scheme for accumulated credit, and accepted that the time limit under Section 11B could not defeat a claim supported by export evidence and credit records. On that basis, the refund claim was allowed as not time-barred.

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Issues: Whether refund of unutilised credit under Rule 5 of the Cenvat Credit Rules, 2004 was governed by the limitation prescribed under Section 11B of the Central Excise Act, 1944.

Analysis: The refund claim arose from export of the entire production and was made under Rule 5 of the Cenvat Credit Rules, 2004. The Tribunal treated Rule 5 and the notification issued thereunder as pari materia with the earlier refund mechanism under Rule 57F of the Central Excise Rules, 1944. It relied on the view that the refund provision is intended to facilitate return of unutilised credit in export cases and that the time limit in Section 11B does not apply where the claim is made pursuant to such notification. The Tribunal also noted that the relevant High Court decisions had held that the limitation provision could not defeat a claim supported by the required export evidence and credit records.

Conclusion: The limitation under Section 11B was held inapplicable to the refund claim, and the assessee was entitled to the refund.

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