Refund of Accumulated Cenvat Credit

[Samir Banerjee]

We have a client (manufacturer of CFL and LED lights) located at Uttarakhand. As per state development policy, the client enjoying exemption from payment of Central Excise. Whereas, while procuring inputs including capital goods from outside Uttarakhand they are liable to pay Excise Duty, which they are unable to utilize with the result it is amounting to cost for them. Is there any prescribed process under any rule whereby they can get the amount of un-utilized Cenvat?

[CSSANJAY MALHOTRA]

Dear Samir,

Refund of unutilised credit can be availed under Rule 5 of CCR 2004 provided the physical exports have taken place irrespective of whether the goods are excisable or exempted.

In case of domestic clearances of exempted goods, CENVAT credit on input is not available if the final product is exempted. Hence, when CENVAT is not eligible, no issue of refund of unutilised credit stands.

 

 

AI Summary

Refund of Cenvat credit available for exporters where physical exports occurred, subject to eligibility under CCR Rule 5. The operative avenue for recovery is a refund of unutilised Cenvat credit claimable where physical exports have occurred, irrespective of whether the exported goods are excisable or exempted; conversely, for domestic clearances of exempt goods Cenvat credit on inputs is not available and no refund arises when the credit is ineligible.