UN UTILIZED CENVAT CREDIT REFUN

[ANBALAGAN ANBU]

In Boiler Manufacturing company

We selling agrowaste fuel boiler under Duty exemption.

For the past two years we purchasing material with Excise duty But due the exemption of duty of our product we are utilizing this one.

Please suggest, we will go for refund claim.

If any notification of procedure there regarding this one, please explain.

Thank you,

E. ANBAZHGAN

[Rajagopalan Ranganathan]

Sir,

You can claim refund under rule 5 of CENVAT Credit Rules, 2004 only when you are able to establish that you are not able to to utilize the credit for payment of duty on your final products cleared for home consumption for the reason that major portion of your final product is being exported under letter of undertaking without payment of duty.

If your final product is unconditionally exempted you cannot take the credit at all. If you have taken any such credit please reverse the same immediately. Otherwise Department will initiate action against you for taking credit wrongly under rule 15 of CENVAT Credit Rules,2004.

[Arun Kumar Singh]

If your final products are exported then you are eligible for refund of duty.

AI Summary

CENVAT credit refund: eligible when non-utilization arises from exports under a letter of undertaking; exempt outputs bar credit. Refund of CENVAT credit is available where credit cannot be utilized because a significant portion of final products are exported under a letter of undertaking without payment of duty. If the final product is unconditionally exempt, input credit is not allowable and any credit taken must be reversed immediately to avoid departmental compliance proceedings.