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of <h1>Successful Appeal Allows Rebate Claim for Polyester Yarn AED, Refund under CENVAT Credit Rules</h1> <h3>DRG. LEATHER CLOTH PVT. LTD. Versus COMMISSIONER OF C. EX., COIMBATORE</h3> DRG. LEATHER CLOTH PVT. LTD. Versus COMMISSIONER OF C. EX., COIMBATORE - 2009 (237) E.L.T. 541 (Tri. - Chennai) Issues:Rejection of rebate claim on AED (T&TA) for polyester yarn used in manufacturing PVC leather cloth exported by the appellant.Analysis:The appeal was filed by M/s. D.R.G. Leather Cloth Pvt. Ltd. seeking to vacate the impugned order that upheld the rejection of their rebate claim amounting to Rs. 1,04,076 for AED (T&TA) on polyester yarn used in producing PVC leather cloth exported during the period 9/2003 to 11/2004. The lower authorities denied the rebate claim stating that since the final product PVC leather cloth was not subject to AED (T&TA), the appellant could not claim a refund of AED (T&TA) paid on the input, i.e., polyester yarn. The appellant contended that similar disputes had been decided in their favor by the Tribunal in previous cases and cited relevant case laws to support their claim.The Member (T) carefully considered the facts and submissions. It was noted that while the final product PVC leather cloth was exempt from AED (T&TA), the appellant exported the entire production and was able to obtain a rebate of basic excise duty on the final products. The AED (T&TA) paid on the input, i.e., polyester yarn, accumulated in the appellant's accounts as they could not utilize it for duty payment or claim it as a rebate. Rule 5 of CENVAT Credit Rules, 2002 allowed for refund of such accumulated AED (T&TA) under specified conditions. The Member (T) referred to a previous Tribunal decision and a CBEC circular supporting the eligibility of the appellant for the claimed amount.Based on the judicial authorities cited and the CBEC circular, it was concluded that the appellant was indeed eligible for the rebate claim. The decisions of the lower authorities were deemed inconsistent with legal provisions. Consequently, the impugned order was set aside, and the appeal filed by D.R.G. Leather Cloth Pvt. Ltd. was allowed. The judgment was pronounced on 16-9-2008.
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