By TIOL News Service

MUMBAI, AUG 17, 2017: THE appellants are engaged in the manufacture of dutiable goods as well as exempted goods. They have exported exempted goods and claimed refund in respect of accumulated credit against exports of goods.

Commissioner(Appeals) upheld the rejection of refund claim ordered by the original adjudicating authority on the ground that finished goods attracted Nil rate of duty, therefore, there was no question of availing CENVATCredit and consequently its accumulation and its refund. The claim was also rejected on the ground that the same was not filed on quarterly basis.

The appellant is before the CESTAT and by placing reliance on the decisions in Gujarat Ambuja Exports Ltd - 2016-TIOL-2580-CESTAT-DEL & Repro India Ltd - 2007-TIOL-795-HC-MUM-CX submits that refund under Rule 5 of CCR cannot be rejected on the ground that finished goods attracted Nil rate of duty and, therefore, credit could not have been availed. On the second ground taken for rejection of the refund claims, the appellant emphasized that overall period for filing refund claims as provided u/s 11Bof the CEA, 1944 is one year; that filling of claim on quarterly basis is a procedural requirement.

The AR reiterated the findings of the impugned orders.

The Bench agreed with the reliance placed by the appellant on the decisions in Gujarat Ambuja Exports Ltd (supra) and Repro India Ltd (supra) and further observed -

"…I also find that Rule 6(6)(5) also provides that where the goods are exported the CENVAT credit is admissible. Therefore even the goods are not dutiable or attracted Nil rate of duty if it is exported, refund under Rule 5 is legally available to the assessee, therefore on this ground rejection of refund claim is not sustainable."

The Tribunal also noted that the appellant's case was supported by the following decisions:

(a) Wellknown Polyester Ltd - 2011-TIOL-989-CESTAT-AHM

(b) Drish Shoes Ltd - 2010-TIOL-350-HC-HP-CX

(c) Sharp Menthol India Ltd - 2011-TIOL-490-HC-MUM-CX upheld by the Supreme Court

On the second ground taken by the lower authorities for rejecting the refund claim, the CESTAT observed -

"As regard the issue that refund was not filed on quarterly basis, I find that filing the refund on quarterly basis is a procedural requirement and facility provided to the assessee that instead of one year appellant can file refund claim on quarterly basis. However, overall period of limitation for filing refund claim is one year as provided under Section 11B, therefore refund claim which is filed within one year, refund cannot be rejected on the ground that it was not filed on quarterly basis…"

Concluding that the lower authorities had wrongly rejected the refund claims, impugned orders were set aside and the matter was remanded to the adjudicating authority to pass fresh order(s).

(See 2017-TIOL-2960-CESTAT-MUM)