2023 (6) TMI 451

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.... The department noticed several discrepancies in respect of the said claims and consequently issued three Show Cause Notices proposing to reject the claims. All the three show cause notices were adjudicated under the common Order-In-Original dated 19.02.2013, wherein the adjudicating authority has rejected all the three claims. Aggrieved, the appellant filed appeal before the Commissioner (Appeals), who vide impugned order upheld the order of the lower authority and rejected the appeal. Hence this appeal. 3. Learned Counsel Shri, Disha Gursahaney appearing on behalf of appellant submits that the appellant is engaged in the manufacture of excisable goods viz., 4,4 Dichloro Diphenyl Sulphone falling under chapter heading no. 29 of the Central Excise Act, 1985. Appellant exported the said goods under bond without payment of duty. During the course of manufacture of goods, certain process waste is also generated and the same is also cleared in the domestic market upon payment of appropriate excise duty. The said facts have been duly disclosed by the appellant in their monthly Excise (ER-1) returns filed. Since all the said finished goods were cleared by way of export i.e outside the....

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....-CE. 4. Shri, Tara Parakash Learned Assistant Commissioner(AR) appearing for Revenue relied on the impugned order. 5. We have carefully considered the submissions made by both sides and perused the records. 5.1 We find that the issue which arises for consideration would relate to refund claims made by the appellants under Rule 5 of the CENVAT Credit Rules, 2004, post 31-3-2012 and for the earlier period also. Hence, Rule 5 of the CENVAT Credit Rules, 2004 which was in force up to 31-3-2012 and the Rules made from 1-4-2012 are extracted herein below : Rule 5 of the Cenvat Credit Rules, 2004 before 1-4-2012 "RULE 5.Refund of CENVAT credit. - Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of, (i) duty of excise on any final product cleared for home consumption or for expo....

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.... services" means the value of the export service calculated in the following manner, namely :- Export turnover of services = payments received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period - advances received for export services for which the provision of service has not been completed during the relevant period; (E) "Total turnover" means sum total of the value of - (a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported; (b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of all other services, during the relevant period; and (c) all inputs removed as such under sub-rule (5) of rule 3 against an invoice, during the period for which the claim is filed. (2) This rule shall apply to exports made on or after the 1st April, 2012 : Provided that the refund may be claimed under this rule, as existing, prior to the commencement of the CENVAT Credit (Third Amendmen....

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.... been filed under Rule 5 of the rules, which is a beneficial provision for manufacturer who cleared final product or intermediate product for export without payment of duty under bond, etc. We find that in the present matter Ld. Commissioner rejected the refund claim on following ground. "9. I find that as per the said rule 5, the refund is available in case where adjustment of the cenvat credit is not possible for the payment of duty of excise on any final products cleared for home consumption or for export on payment of duty or for the payment of service tax on output service. In the instant case, it has been clearly found by the adjudicating authority that the appellant is a DTA unit and there is clear possibility of the adjustment of credit towards payment of duty on the finished products cleared for home consumption or for export on payment of duty. In my view, the rule is very clear to the extent that the cenvat credit in respect of the input or input services so used shall be allowed to be utilized by the manufacturer or provider of output services mainly, towards payment of duty of excise on any final products or for the payment of service tax. But in case the abov....

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..... 148 (Tri.-Mum.). (supra), the Tribunal observed as follows : "We agree with the ld. Advocate appearing for the appellant that the provisions of Rule 5 relating to refund of Modvat credit accumulated in the records on account of their non-utilization for the exported goods is a beneficiary piece of legislation, the refund arising on account of the same cannot be denied being a substantive right of the citizen. The wording of Rule 5 read with Rule 3 are very clear providing for refund of accumulated modvat credit if the same cannot be adjusted for any reason. As such the only condition in the said Rule is non-utilization of the credit and no-jurisdiction vests in the Central Excise officer to find out the reason for such non-adjustment. The use of the expression that "where for any reason" such adjustment is not possible; the manufacturer shall be allowed refund of such amount is an unlimited expression and cannot be narrowed or curtailed down by the departmental authorities." 10. The ratio of this decision supports the obvious reading that when the manufacturer exports his finished products without payment of duty and is not in a position to utilize the credit fo....