By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Refund of CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No.5/2006-CE (NT) dated 14/03/2006, should be filed within 1 year from the date when the goods were cleared for export.
Facts:
The respondents filed refund claims for unutilised CENVAT credit of duty paid on inputs and capital goods used in the manufacture of export goods vide Notification No.5/2006-CE (NT) dated 14/03/2006 read with Rule 5 of the CENVAT Credit Rules, 2004. The claims were rejected as timebarred.
The revenue contended that though section 11B of the Central Excise Act, 1944 was applicable only in respect of duty and interest and not in respect of CENVAT credit, section 11B of the Central Excise Act, 1944 was made applicable to refund of CENVAT credit through clause 6 of the Notification No.5/2006-CE (NT) dated 14/03/2006 read with Rule 5 of the CENVAT Credit Rules, 2004 providing for refund of CENVAT credit. However, CESTAT passed the order in favour of the respondents and held that as per Rule 5 of the CENVAT Credit Rules, 2004, no notification was issued with respect to “relevant date” as defined u/s. 11B(5)(B) of the Central Excise Act, 1944 and therefore, no period of limitation was prescribed.
Held:
It was undisputed fact that section 11B of the Central Excise Act, 1944 was applicable only in case of duty and not with respect to CENVAT credit. However, on analysing the relevant provisions, specifically, Rule 5 of the CENVAT Credit Rules, 2004, it was observed that though there is no specific “relevant date” prescribed in the notification, the relevant date should be the date on which final products were cleared for exports. The Hon’ble High Court distinguished the decision of Hon’ble Gujarat High Court’s in case of Commissioner of Central Excise and Customs vs. Swagat Synthetics 2008 (232) ELT 413 (Guj.) and departed from Madhya Pradesh High Court’s decision in case of STI India Ltd. vs. Commissioner of Customs and Central Excise, Indore 2009 (236) ELT 248 (MP) and held that the refund claims filed by respondents were time-barred. Note: In 2012 (281) ELT 227 (Mad.) Dorcas Market Makers P. Ltd. vs. CCE, Single Member Bench decided that rebate cannot be rejected on the ground of limitation. However, the said decision was considered inapplicable by the Bombay High Court in Everest Flavours Ltd. vs. UOI 2012 (282) ELT 481 (Bom.) which also ruled that limitation prescribed in section 11B applied to rebate claim as well.
