Refund of excise duty

[varun arora]

Dear sir

If duty rate on final product is 12.50% and on raw material is 6% then can i take the refund back from thr deptt. As of accumulated cenvat unutilized.

Thanks in advance.

[CSSANJAY MALHOTRA]

Refund of accumulated CENVAT Credit is available only in case of Exports under Rule 5 of CENVAT Credit Rules. If the credit has been accumulated due to inverted Duty structure, no Refund is admissible.

[KASTURI SETHI]

I fully endorse the views of Sh.CS Sanjay Malhotra, Sir.

[Mahir S]

Yes the views expressed above are correct.

However, you may export the goods under rebate and take refund thereof.

Further, in your case, if the duty rate is more than the raw material rate, then the question of accumulation of cenvat credit should not arise.

[KASTURI SETHI]

Sh. Mahir S.Sir is right as I think rates of duty on raw material and final product have been mentioned wrongly. The querist wanted to mention rate of duty @12.5% on raw material and @6% on final product. Am I right, Sir ?

[CSSANJAY MALHOTRA]

Respected Sir Sh. Kasturi ji,

Am in agreement in you. Have considered the duty rate of 12.5% on RM and 6% on CG or else CENVAT Credit can't be accumulated.

Queriest might have placed the figures inadvertently as none can;t place question in event of CENVAT on FG higher than RM, as in said situation, one woud paying through PLA....hence, no question of CENVAT accumulation comes in...

[varun arora]

Thank you all Experts and Rates which i have mentioned on rm and fg is by mistake. But you all answered by query very well.

Thanks a lot Sir.

[Mahir S]

[Suryanarayana Sathineni]

Dear Sir,

As already stated, in the given circumstances, paying duty on exports under claim for rebate under Rule 18 of CER,2002 is the best option which is simple,easy to get the accumulated cenvat in to liquid cash and less cumbersome when compared to Refund under Rule 5 of CCR 2004.

However, if your company is not having any exports, then you may have to live with the accumulation

Regards,

S Suryanarayana

[varun arora]

Thank you so much all Experts.

[Guest]

Dear All Experts Greeting of the day

We had one unit at jammu which had been established to Avail 100% excise refund as per Notification no 56/2002 CE Dated 14.11.2002 but later on in 2008 they have amended this through notification no 19/2008 which slash down to 36% refund only ,Ultimately all the assessee had filed the petition in the Humble court and during 2010 the said case were received in favour of assesee in single bench ,Later the department went on double bench against this order in the High court and still it is pending in the court for decision.,.During the period of 2011 &2012 based on this court decision we had taken 100% refund where as the department had taken this in the view as excess credit and issued an SCN to us requesting to pay the balance 64% which might comes around 1 crores on the other side we had also file the writ petition in the said court ,Now we had closed down the opreration last year and when approached excise departments for NOC ,They had requested us to produce Bank guarantee against their amount ,To be frank we are not in the posstion to get the bank gurantee right now .Can u please guide us to come out of this issues fyki we are also willing to indemnity bond and even surety from our sister concern located at tamil nadu which is under excise not but department are not in a position to accept this,Kindly do the needful.

[Guest]

WAITING FOR EXPERTS SUGGESTION PLS

[CSSANJAY MALHOTRA]

Dear Mr. Akbar,

My submission is to login new query as the issue you have raised in altogether different from the trailing issue which divert the thought process of Experts.

Excise Department has to take into consideration the interest of Revenue, hence their stand is correct. I have seen from my experiences that the assessee's have taken these type of scenarios in High Court who have either lower the amount or provide other legal remedy to protect the revenue interest considering the facts of the case.

Let other experts too share their views, but my submission is to take up with High Court for directions to the Revenue Dept.

[Guest]

NOTED WITH MANY THANKS ,APPOLOGY FOR THE INCONVENICENCE CAUSED ,AWAITING EAGERLY THE REPLY FROM OTHER EXPERTS ,

[Guest]

AWAITING EAGERLY THE REPLY FROM THE OTHER EXPERTS PLEASE

AI Summary

Refund for Accumulated CENVAT Credit Limited to Exports Under Rule 5; Legal Remedies Suggested for Excise Duty Issues A participant in a discussion forum inquired about the possibility of obtaining a refund for accumulated CENVAT credit due to an inverted duty structure, where the duty rate on the final product was higher than on raw materials. Experts clarified that refunds are typically available only for exports under Rule 5 of the CENVAT Credit Rules. They suggested exporting goods under rebate to benefit from refunds. Another participant shared a separate issue regarding excise duty refunds in Jammu, where a court case was pending, and the excise department requested a bank guarantee for unresolved credits. Experts advised pursuing legal remedies in court.