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Issues: (i) Whether cash refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 is admissible in respect of clearances made without payment of duty to a 100% export oriented unit; (ii) Whether the limitation period under Section 11B of the Central Excise Act, 1944 applies to a refund claim under Rule 5.
Issue (i): Whether cash refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 is admissible in respect of clearances made without payment of duty to a 100% export oriented unit.
Analysis: The provision was held to cover refund of accumulated credit where the goods are cleared for export purposes, and the clearances to a 100% export oriented unit were treated as export-related clearances for this purpose. The reliance placed on the Foreign Trade Policy to deny the refund was found insufficient because the refund entitlement flowed from Rule 5 and the settled judicial view on treatment of such clearances.
Conclusion: The refund under Rule 5 was admissible for supplies made without payment of duty to a 100% export oriented unit, and denial of refund on the ground that such supplies were only deemed exports was incorrect.
Issue (ii): Whether the limitation period under Section 11B of the Central Excise Act, 1944 applies to a refund claim under Rule 5.
Analysis: The claim for refund under Rule 5 was held to stand on a different footing from a refund claim governed by Section 11B. The limitation prescribed in Section 11B was therefore not applicable to cash refund of accumulated Cenvat credit under Rule 5.
Conclusion: The refund claim was not barred by limitation under Section 11B.
Final Conclusion: The denial of refund was unsustainable on both counts, and the orders below were set aside in full, resulting in allowance of the appeals.
Ratio Decidendi: Cash refund of accumulated Cenvat credit under Rule 5 cannot be denied for clearances to a 100% export oriented unit, and the limitation period in Section 11B does not govern such a Rule 5 refund claim.
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