TaxTMI 
TaxTMI 
2025 (7) TMI 1334
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....erred to as "the impugned order") passed by the Commissioner of Central Excise, Belapur. 2.1 Brief facts of the case, leading to these appeals, are summarized herein below: 2.2. The appellants herein is a 100% Export Oriented Unit (EOU) and is engaged inter alia, in the manufacture of 'fatty acids, fatty alcohols and soap noodles' falling under chapter heading 3823 and 3401 of the First Schedule to the Central Excise Tariff Act, 1985 at their factory in Taloja. The appellants are the registered taxpayers holding Central Excise Registration No. AAACV3847RXM007 for manufacture of aforesaid finished products and for compliance with the central excise statute. 2.3 The appellants avail CENVAT credit on inputs used in the manufacture of its finished goods. Since, the appellants are engaged as a 100% EOU, they were unable to utilise the input credit of CENVAT, and in respect of unutilised CENVAT credit lying in the account, they had filed various refund claims of the accumulated CENVAT credit for the period December, 2007 to July, 2010. The details of some of such refund claims filed by the appellants which were sanctioned by the Department are given in the form of Table below : ....
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....he officers of the Headquarters (Preventive) on the appellants, the Department had again initiated show cause proceedings for recovery of CENVAT credit of duty sanctioned earlier under Rule 5 of CENVAT Credit Rules, 2004 read with Section 11B of the Central Excise Act, 1944 covering the period December, 2007 to July, 2008; February, 2010 and March, 2010, totally for an amount of Rs.3,41,28,330/- along with interest under Section 11A(1) of the Central Excise Act, 1944 by invoking the extended period of time and for imposition of consequent penalty under section 11AC ibid read with Rule 26(2)(ii) of the Central Excise Rules, 2002 vide Show Cause Notice (SCN) dated 03.12.2013. In adjudication of the aforesaid SCN, learned Commissioner of Central Excise, upon examination of the various issues had confirmed the duty demands raised in the SCN, besides imposing of penalty for equal amount of duty demanded, under Section 11AC ibid read with Rule 26(2)(ii) ibid vide order dated 12.06.2014. Feeling aggrieved with the impugned order, the appellants have preferred these appeals before the Tribunal. 3. Learned Advocate appearing for the appellants had submitted that the issue as to whether t....
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....we find that the in the case of Collector of Central Excise Vs. Chemphar Drugs & Liniments 1989 (40) E.L.T. 276 (S.C.), the Hon'ble Supreme Court has held that there should be evidential record to prove that something positive other than mere inaction or failure on the part of the manufacturer or producer, or conscious or deliberate withholding of information, when the manufacturer knew otherwise, is required to saddle the manufacturer with duty liability for the extended period. The relevant paragraph in the said judgement is extracted and given below: "8........In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate with....
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....hat the raw materials/inputs i.e. distilled fatty acid received by the appellant is since already marketable and further distillation of same does not result into 'manufacture' and accordingly, on export of the said goods, cash refund cannot be allowed. Further, since the process of distillation carried out by the appellant is continuous one and there is no one to one correlation between the inputs and export goods manufactured and cleared in a particular month, accordingly, cash refund of accumulated credit cannot be granted to the appellant. 10. As far as the issue of marketability, the appellant admittedly received duty paid distilled fatty acid and in the impugned order the learned Commissioner (Appeals) observed that the raw material is subjected to further process of distillation. The finding of the learned Commissioner (Appeals) is that the further distillation process only improves/enhances the marketability of the raw material i.e. the distilled fatty acid, hence cannot be considered that a new commodity resulted out of further distillation. The relevant Chapter Note 9 to Chapter 38 reads as under : - "9. In relation to products of heading 3808, addition ....
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....during the month so as to allow refund of the accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004, we find that the issue is considered by this Tribunal in a series of cases referred by the learned Advocate where under it has been held that to claim refund of accumulated credit under Rule 5 of CENVAT Credit Rules, 2004, there is no need to show that the same input on which credit taken and claimed as fund must have been used in the finished goods and exported during the period for which the refund is claimed. 13. In the result, the impugned orders are set aside and the appeals are allowed with consequential relief, if any, as per law. Member (Judicial) 2. The present issue is in respect of the refund claims filed in terms of Rule 6 of the CENVAT Credit Rules, 2004 as amended from time to time. The said rule provides for the refund of accumulated credit in the CENVAT account in respect of goods and services exported under bond or undertaking. This rule is very specific and lays down how to determine the quantum of admissible refund from the accumulated credit. It is not a proceeding for the denial of credit available in the CENVAT accou....