Refund of unused CENVAT credit

[biren parikh]

We have a manufacturing unit and have excise registration and from past 1 one year unit is not working and we have unutilized credit lying in our CENVAT how can we encash the credit it will also be ok if we have to surrender the registration.

[YAGAY andSUN]

If accumulation is due to export of goods under bond, then, you may adopt following procedure:-

Refund of accumulated CENVAT credit for export under bond.

Rule 5 of Cenvat Credit Rule read with Notification No. 5/2006 CE (NT) dated 14.3.2006.

1. Refund Application in Form as prescribed under Notification.

2. Relevant extracts of the records maintained under Cenvat Credit Rules in respect of input duty credit taken

3. Statement/ Documents to show use of inputs/ input services in the exported goods.

4. Original copy of ARE-1.

5. Invoice issued under Rule 11 of Central Excise Rule, 2002

6. Self attested copy of Shipping Bill (EP copy) and Bill of lading/ Airway Bill.

7. Disclaimer certificate. (in case claimant is other than exporter)

8. Any other document in support of the refund claim.

[Dilip Darji]

Dear Sir.

Refund under Rule 5 is the only way out to get back unnued credit lying with you.

[Guest]

Dear sir

In our case Cenvat is accumulating because we do only assembling and does not have a sufficient margin to generate output liability. can you suggest a way out of this.

Regards

Rahul

AI Summary

Refund of CENVAT credit: statutory refund procedure is the principal route to reclaim accumulated unutilised credit from exports or inactivity. Where CENVAT credit accumulates due to exports under bond or inactivity, the operative remedy is a refund under the statutory refund procedure. Claimants must submit the prescribed refund application together with CENVAT records, evidence of input or input service use in exported goods, original ARE-1, relevant invoices, shipping documentation, and a disclaimer certificate where applicable; other supporting documents may be required. The discussion confirms refund under the statutory procedure as the primary means to recover unutilised credit, including where assembly operations fail to generate output liability.