Customs, Excise and Gold Tribunal - Mumbai
Pee Vee Textile Ltd. vs Commissioner Of Customs And Central ... on 14 March, 2005
Equivalent citations: 2005(186)ELT252(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. These appeals are taken up together, as the issue is common though the appeals are directed against three separate orders of the Commissioner (Appeals). Briefly the facts are that the appellant is engaged in the manufacture of Polyester Viscose Blended Yarn, a substantial portion of which is exported. The appellant accumulated CENVAT credit, which for payment of duty. He therefore applied for refund of such accumulated credit. It was denied. Hence, these appeals.
Appeal No. E/2132/032
2. The appellant filed a refund claim for Rs. 92,50,000/0 being the accumulated credit for the quarter July 2002 to September 2002 under Rule 5 of the CENVAT Credit Rules 2002, which reads as follows:
5. Refund of CENVAT credit - where any inputs are used in the final products which are cleared for export under bond ............. The CENVAT Credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise and for any reason (Emphasis added) such adjustment is not possible the manufacturer shall be allowed refund of such amount subject to limitation, safeguards etc. Notification No. 11/2002 CENT specifies application form and conditions for claiming refund of CENVAT.
3. The refund claim was rejected by the Assistant/Deputy Commissioner and the appellant filed an appeal before the Commissioner.
4. The Commissioner while dealing with the appeal before him held that the appellant was entitled to a refund of accumulated credit of Rs. 14,20,796/- and not to Rs. 92,50,000/- as applied for. His findings are based on the following observations:
(a) Closing balance as on 30/6/2002 of CENVAT Credit in respect of inputs with the appellant was Rs. 59,28,123;
(b) CENVAT Credit earned during the quarter July 2002 to September 2002 was Rs. 1,87,67,113/-;
(c) CENVAT Credit utilized during the quarter (July 2002 to September 2002) was Rs. 1,73,46,317/-;
(d) Closing balance of credit as on 30/09/2003 was Rs. 73,48,916/-;
(e) Opening balance of credit of Rs. 59,28,123/- should be deducted from the closing balance to arrive at the accumulated credit for the quarter July 2002 -September 2002. The balance is Rs. 14,20,796/- is alone refundable.
5. Heard both sides.
6. Neither Rule 5 of CENVAT Credit Rules nor the Notification issued under it says that the opening balance lying in the credit account should not be considered while dealing with a refund claim for credit accumulated during the quarter. What all the Rule says is that credit in respect of inputs used in the manufacture of export goods can be refunded if for any reason such credit cannot be utilized for payment of duty. The appellant claim is that he is not in a position to utilize the credit and therefore it be refunded. The Commissioner's finding that the opening balance of credit as on 30/06/02 should be deducted from the balance of credit at the end of the quarter 01/07/02 to 30/09/02 is erroneous. His further observation that the opening balance as on 30/06/02 also consists of capital goods credit and therefore cannot be a part of accumulated credit under Rule 5 is equally erroneous. The expression 'inputs' used in Rule 5 covers all inputs including capital goods as defined in Rule 2. Before sanctioning any refund under Rule 5 of CENVAT Credit Rules, one has to only examine whether the accumulated credit pertains to inputs that have gone into the production of goods, which were exported and secondly whether the application for refund is in no position to utilize the accumulated credit. The Notification issued under Rule 5 does not say that if a manufacturer exporter fails to make an application for refund of accumulated credit at the end of the quarter he would not be entitled for refund of credit which accrued to him in the previous quarter.
7. In view of our observations above, we are unable to agree with the Ld. Commissioner that the previous balance of credit should be deducted from the accumulated credit during the quarter for which refund application is made. We also do not agree with the finding that capital goods credit should be deducted while arriving at the correct amount of refund.
8. The order of the Commissioner is set aside and remanded to him for a fresh consideration with the following directions.
(a) He should examine whether the balance of credit as on 30/06/2002 pertains to credit on inputs which have been used in relation to production of goods which were exported.
(b) He shall also examine whether the credit could have been utilized for payment of duty on domestic clearances.
(c) He shall strictly confine to the provisions of Rule 5 of CENVAT Rules 2002 while dealing with the appeal before him.
9. The appeal is thus allowed by way of remand.
10. Appeal Nos. 2133 and 2943/03 are similarly remanded for fresh consideration for the reasons cited above.
11. All three appeals are allowed by way of remand to the Commissioner (Appeals) for a fresh consideration.
(Operative part pronounced in the Court)