Refund of unutilised Cenvat credit allowed for intermediate goods used in exported final products by another manufacturer.

Refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2002 is admissible where processed inputs are cleared as intermediate products for use in goods exported by another manufacturer, provided the prescribed conditions are met. The Tribunal noted that the rule covers credit linked to inputs used in the export chain, and refund is not denied merely because the claimant is not the direct exporter. As the exported garments were not shown to have been cleared under drawback or rebate and the credit could not otherwise be used for domestic duty payment, the objection to refund failed and the claim was allowed.

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Issues: Whether refund of surplus Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2002 is admissible to a manufacturer whose goods are cleared as intermediate products for use in export goods by another manufacturer, even though the manufacturer is not the direct exporter.

Analysis: The claim arose from clearance of processed fabrics without payment of duty for use in the manufacture of garments that were exported out of India. The Tribunal noted that Rule 5 permits refund of unutilized credit where inputs are used in goods cleared for export, including intermediate products used in the manufacture of exported final goods. The exported garments were not shown to have been cleared under drawback or rebate, and the credit could not be otherwise utilized for domestic duty payment. The Tribunal followed earlier decisions holding that refund is not denied merely because the export does not take place from the claimant's own factory, so long as the credit relates to inputs used in the export chain and the prescribed conditions are met.

Conclusion: Refund of the unutilized Cenvat credit was admissible, and the objection that the claimant was not the direct exporter failed.

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