Accumulation of Cenvat Credit

[Samir Banerjee]

Dear Sir

A manufacturing unit say 'A' procuring inputs on payment of Tariff Rate of Excise Duty let us assume 12%

but while clearing their finished goods the rate of duty is less than the rate of duty paid on capital goods and inputs, with the result, the huge amount of Cenvat credit being accumulated and adding cost to the company. Please advise in this scenario is there any provision in Cenvat Credit refund rule to get the refund of accumulated Cenvat Credit. If yes, under which Notification and what would be the procedure to get the refund?

AI Summary

Manufacturing Unit 'A' Can Claim Cenvat Credit Refund Only If Exports Surpass Domestic Sales Under Rule 5, CENVAT Credit Rules 2004. A manufacturing unit, referred to as 'A,' faces an issue with accumulating Cenvat Credit due to a disparity between the excise duty paid on inputs and the lower duty rate on finished goods. This accumulation adds to the company's costs. The query seeks advice on whether there is a provision for refunding the accumulated Cenvat Credit. The response clarifies that a refund is possible only if the company's exports exceed domestic clearances, allowing a claim under Rule 5 of the CENVAT Credit Rules, 2004. No other provisions under the Central Excise Act, 1944, allow for such a refund.