EOU refund claim rejected as time-barred under Rule 5 Cenvat Credit Rules shipping bills filed late

The CESTAT Bangalore dismissed an appeal by a 100% EOU seeking refund of unutilized cenvat credit on inputs and input services. The refund claim was rejected as time-barred since the complete claim with required shipping bills was filed on 14.10.2019, two years after the Commissioner's order, violating the time limit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (NT). The authority had earlier sanctioned only partial refund for complete documentation and rejected the balance lacking shipping bills. The tribunal upheld the rejection, noting shipping bills are mandatory for Rule 5 refund claims and Section 142 provisions regarding lapsed rejected amounts.

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Issues Involved:
1. Eligibility for refund of unutilized CENVAT credit.
2. Time limit for submission of shipping bills.
3. Restoration of unutilized credit upon rejection of refund.

Summary:

Issue 1: Eligibility for refund of unutilized CENVAT credit
The appellant, a 100% EOU manufacturing and exporting 'Crystal and Oscillators', filed a refund claim of unutilized CENVAT credit on inputs and input services. The original authority granted a partial refund but rejected the balance due to the absence of shipping bills. The Commissioner (Appeals) remanded the case for verification of shipping bills. Rule 5 of the CENVAT Credit Rules, 2004, and Notification No. 27/2012-CE (NT) dated 18.6.2012 were cited, which state that refund claims must be accompanied by shipping bills.

Issue 2: Time limit for submission of shipping bills
The appellant submitted shipping bills on 15.07.2019, after the Commissioner (Appeals) remanded the case on 27.10.2017. The original authority rejected the refund claim as it was filed beyond the time limit specified in Section 11B(ec) of the Central Excise Act, 1944. The Tribunal upheld the rejection, stating that the refund claim filed after two years from the date of the Commissioner (Appeals) order was time-barred.

Issue 3: Restoration of unutilized credit upon rejection of refund
The appellant alternatively requested that the unutilized credit be restored under Section 142 of the Central Goods and Service Tax Act, 2017. The Tribunal distinguished this case from the appellant's previous case, noting that the current appeal was under Rule 5 of the CENVAT Credit Rules, 2004. The Tribunal ruled that under Section 142, any rejected claim for refund of CENVAT credit would lapse.

Conclusion:
The appeal was dismissed, and the Tribunal upheld the rejection of the refund claim on the grounds of being time-barred and clarified that the unutilized credit could not be restored under Section 142 of the CGST Act, 2017. The order was pronounced in Open Court on 19.12.2023.

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