Custom, Excise & Service Tax Tribunal
Mehta Stone Exprt House vs Cce & St-Jaipur-I on 11 December, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi-110066 Court No. IV ST/502/2012-ST [SM] Mehta Stone Exprt House Appellant Vs. CCE & ST-Jaipur-I Respondent
Present for the Appellant: Ms. Rinki Arora, Advocate Present for the Respondent: Shri B.B. Sharma, DR.
Coram: Honble Sh. Manmohan Singh, Member (Technical) Date of hearing: 30/09/2014 Pronounced on: 11/12/2014 Final Order No.54700/2014 Per: Manmohan Singh Appellant has come in appeal against Order-in-Appeal No, 03(AKJ)ST/JPR-I/2011 dated 01.02.2012 wherein Commissioner (Appeals) rejected their appeal under Section 11B of the Central Excise Act, 1944 under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CX (NT) dated 01.3.2006 being hit by bar of limitation.
2. Brief facts of the case are recaptured from Order-in-Appeal to appreciate the issue.
Appellant is a 100% E.O.U. and engaged in the manufacture and export of Slate stone & sand stone falling under Chapter 25 of the first schedule to the Central Excise Tariff Act, 1985 has filed a refund claim of Rs.111282/- under Rule 5 of the Cenvat Credit Rules, 2004 (hereinafte referred to as the Credit Rules), in respect of the unutilized Cenvat Credit taken on input services during the period January, 2010 to March, 2010. The instant refund claim is filed by the appellant on the grounds that no domestic clearance of finished goods was made by them during the relevant period thus; the Cenvat Credit availed on input services could not be utilized by them.
3. During the scrutiny of the said claim it was intimated by the R.O. Behror vide his letter dated 11.05.2011 & 25.05.2011 that the appellant had already withdrawn the claim for Rs.2526/- for which they were not able to submit original EP copy of relevant Shipping Bill, the refund claim has been revised to Rs.108756/- by the appellant. Out of remaining claim of Rs.108756/- an amount of Rs.95553/- appears to be did not admissible to them as the same is time barred.
4. The refund claim in respect of the goods exported during the period of 01.01.2010 to 28.03.2010appeared not to have been filed before the expiry of the prescribed period of one year. The claim of refund of Cenvat Credit amounting to Rs.95,553/- was proposed to be rejected on the ground of limitation claim of Rs.2526/- was withdrawn by the appellants. Show cause notice culminated into Adjudication Order wherein Adjudicating Authority rejected the refund claim Rs.95,553/- being hit by limitation under Section 11B of the Central Excise Act, 1944 under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CX (NT) dated 01.3.2006.
5. Ld. Counsel of the appellants relied upon the judgement of Honble CESTAT in the case of GTN Engineering (I) Ltd. Vs. Commissioner of Central Excise, Coimbatore wherein Single Bench held that credit accumulated in Cenvat account was not duty paid by the exporter. Only when credit debited towards duty payable, it will amount to payment of duty. Section 11B of Central Excise Act 1944 referred to refund of duty paid. Refund claim was not of duty paid but of Cenvat credit already taken. Relying upon Tribunals judgement in the case of Swagat Synthatic Ltd. 2007 (220) E.L.T. 949 (Tribunal) upheld by Gujrat High Court 2008 (232) E.L.T. 413 (Gujrat) where it was held that accumulated credit was akin to credit in PLA, claim was not considered time barred. It was also held that notification No. 5/2006-CE(NT) did not specify any time limit.
6. Ld. DR responded to the contentions raised by appellants and relied upon Madras High Courts judgement in the case of Commissioner of Central Excise, Coimbatore Vs. GTN Engineering (I) Ltd. 2012 (28) S.T.R. 426 (Mad.) where Honble High Court reversed the Tribunals judgement above and held that time limit under Section 11B of Central Excise Act 1944 was applicable.
Para 11 to 15 were referred which are reproduced:-
11.?We have carefully considered the abovesaid submissions. The relevant portion in Section 11B of the Central Excise Act, 1944, reads as under :
11B.?Claim for refund of [duty and interest, if any, paid on such duty. - (1) Any person claiming refund of any [duty of excise and interest, if any, paid on such duty] may make an application for refund of such [duty and interest, if any, paid on such duty] to the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] before the expiry of [one year] [from the relevant date] [in such form and manner] as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of [duty of excise and interest, if any, paid on such duty] in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such [duty or interest, if any, paid on such duty] had not been passed on by him to any other person.
12.?By that provision, a claim for refund is made available in case of refund of duty and interest, if any paid on such duty and as far as that provision is concerned, there is no dispute that it is applicable only in case of duty paid and not on the CENVAT credit facilities. As already pointed out, to tide over the situation and also to make eligible for the manufacturer of the final products which is 100% export oriented, Rule 5 of the CENVAT Credit Rules, 2004, entitles for making claim for refund of CENVAT credit and the relevant portion of the said rule reads as under :
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 export on payment of duty; or
(ii) service tax on output service and where for any reason such adjustment is not possible, the manufacturer or provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification.
13.?In terms of the said rule, the Central Government should notify as to the safeguards, conditions and limitations. Accordingly, Notification No. 5/2006-C.E. (N.T.), dated 14-3-2006 has issued. Clause 6 appendix to the notification reads as under :
6.?The application in Form A, along with the prescribed enclosures and the relevant extracts of the records maintained under the Central Excise Rules, 2002, CENVAT Credit Rules, 2004, or the Service Tax Rules, 1994, in original are filed with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in Section 11B of the Central Excise Act, 1944 (1 of 1944).
14.?The said notification prescribes a period of one year, as provided under section 11B of the Central Excise Act, for the purpose of making application in Form-A along with prescribed enclosures and also the relevant extracts of the records maintained under the Central Excise Rules, 2002, Cenvat Credit Rules, 2004 or Service Tax Rules, 1994 in original. That application should be filed before the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. For the purpose of finding out as to the relevant date for the purpose of making claim for refund of CENVAT credit, Rule 5 should be made applicable. It is the contention of the learned counsel for the assessee that the provision defining relevant date does not cover the claim for refund of CENVAT credit. We may point out that when a statute empowered for such claim, the said provision must be read to find out as to the relevant date. Rule 5 specifies that where any input or input service is used in the manufactures 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.
15.?A reading of the above rule, though there is no specific relevant date is prescribed in the notification, the relevant date must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim of refund of CENVAT credit. Admittedly, the respondent has made a claim only invoking Rule 5 of the CENVAT Credit Rules, 2004. In that view of the matter, there cannot be any difficulty for us to hold that the relevant date should be the date on which the export of the goods was made and for such goods, refund of CENVAT credit is claimed.
Honble High Court held that even though Section 11B of Central Excise Act, 1944 does not cover refund of Cenvat credit, Notification No. 5/2006-C.E. (N.T.) makes it applicable for that purpose. Relevant date for computing one year period prescribed under Section 11B, ibid, is to be determined by applying Rule 5 of Cenvat Credit Rules, 2004 since without reading of Rule 5 ibid, with Notification ibid, refund claim cannot be filed, limitation provided under Section 11B has to be satisfied. Though Rule 5 does not prescribe any specific relevant date, it has to be the date on which final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to claim of refund of Cenvat credit CESTATs view that no time-limit was applicable for refund of Cenvat credit, found to be incorrect.
7. Heard both sides and examined the records. Issue involved for consideration is where the provision of Section 11B of Central Excise Act, 1944 does not cover refund of Cenvat credit and whether Notification No. 5/2006-C.E. (N.T.) will be applicable for that purpose. While going through the judgment of Honble High Court of Madras in the case of Commissioner of Central Excise, Coimbatore Vs. GTN Engineering (I) Ltd. 2012 (28) S.T.R. 426 (Mad.). It is observed that issue have been examined in detail in para 11 to para 15 as referred above clearly indicating the mind of Honble High Court that claim of refund has to be restricted under Section 11B of the Central Excise Act, 1944, under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CX (NT). Honble High Court also distinguished judgement of Madhya Pradesh High Court at Indore reported in 2009 (236) E.L.T. 248 (M.P.) in the case of STI India Ltd. Vs. Commissioner of Customs and Central Excise, Indore.
8. In view of the above findings, case is clearly established against the appellants.
9. Accordingly, appeal is dismissed.
(Pronounced in the open Court on 11/12/2014) (Manmohan Singh) Member (Technical) K. Gupta ??
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