2008 (3) TMI 97

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....t of fabrics.  From the records it is seen that the finished goods of the appellants were entirely cleared for export.  As the appellant was not in a position to utilize the accumulated cenvat credit for payment of duty for want of clearances to home market, they had claimed refund of the accumulated cenvat credit.  The lower authorities rejected the claim on the basis that in terms of Notification No. 11/02-CE(NT) dated 01.03.02, refund of credit of inputs used in the manufacture of final products cleared for exports under bond could be allowed, inter alia, when the manufacturer is not in a position to utilize the credit of the duty on inputs allowed under Rule 3 of the said CCR against goods exported during the quarter or m....

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....reported in 2006 (199) ELT 148 (Tri.-Mum.). In the said decision, the Tribunal had held that refund of accumulated input credit was a substantive right of the citizen.  Such credit accumulated on account of the finished goods being exported had to be refunded if the credit could not be adjusted for any reason.  In the light of the above decision, the impugned order is not sustainable. 4. The Ld. SDR reiterates the reasoning contained in the impugned order. 5. I have carefully considered the facts of the case and submissions by both sides.  Rule 5 of the CCR reads as follows: "5. Refund of CENVAT credit - Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, ....

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.... is not in a position to utilize the credit of the duty on inputs allowed under rule 3 of the said rules against goods exported during the quarter or month to which the claim relates." 6.…. On a combined reading of Rule 5 and the said Notification, it is amply clear that when a manufacturer exports most of his production or entire production and does not have many clearances to the home market, he is not in a position to utilize the accumulated credit for adjustment towards duty payment. The statute specifically provides for grant of refund of the accumulated credit in such circumstances. Therefore, the stand taken by the lower authorities is contrary to law.  In para 6 of Navbharat Industries (supra), the Tribunal observed as ....