2007 (10) TMI 233 - AT - Central Excise

Tribunal Rules Procedural Lapses Cannot Deny Refund Claims

The Tribunal set aside the rejection of refund claims under Rule 5 of Cenvat Credit Rules, 2002, due to non-observance of the Appendix procedure and ... Refund claim for unutilized credit of AED (T&TA) – no dispute to the substantial compliance of the Rule 5 of CCR – appellants declared that they have not filed any other claim for refund u/r 5 to which this claim relates – held that so long export of goods and proper taking of Cenvat credit are not in dispute, refund claim cannot be denied for procedural lapses – rejection of the refund claims for non-fulfillment of the proviso to Clause-2 of the Appendix to the said Not. 11/02 is unjustified Issues:Refund claims under Rule 5 of Cenvat Credit Rules, 2002 rejected due to non-fulfillment of conditions as per Notification No.11/2002-CE (NT).Analysis:The appellants filed refund claims under Rule 5 of Cenvat Credit Rules, 2002, stating they used duty paid fibre for manufacturing goods exported under Bond, unable to utilize the credit of AED (T&TA) on such fibre for discharging duty on final products in the domestic area. The Central Government's Notification No.11/2002-CE (NT) allowed refunds subject to conditions in the Appendix. The refund claims were rejected for not meeting the proviso to Clause-2 of the Appendix. The appellant's advocate argued compliance with Rule 5 and the Appendix's refund claim procedure, highlighting no overlap in the two claims filed monthly. The Department contended that the proviso restricts filing more than one claim monthly.The Tribunal noted the rejection based on non-observance of the Appendix procedure, filing claims twice monthly contrary to the notification conditions. Rule 5 allows Cenvat Credit refunds, with Notification No.11/2002-CE(NT) detailing the refund procedure. A previous Tribunal case settled the admissibility of refund on Additional Excise Duty (T&TA) on exports under Rule 5. A subsequent CBEC Circular clarified eligibility for unutilized credit of Additional Duty of Excise (T&TA) under Rule 5. The appellants sought refunds for unutilized AED (T&TA) in their Cenvat Account on exported goods, appearing entitled to refunds under Rule 5.The Tribunal agreed with the advocate that the Appendix outlines refund safeguarding, conditions, and limitations under Rule 5, with no dispute on substantial Rule 5 compliance. The Tribunal in a previous case held that procedural lapses cannot deny refund claims if export of goods and proper Cenvat credit are undisputed. Consequently, the impugned orders were set aside, remanding the matters to the adjudicating authority for further examination, ensuring a personal hearing opportunity before deciding.(Order dictated & pronounced in open court on 12.10.2007).