Order Date – 07 June 2023

Parties: Vertellus Specialty Materials India Pvt Ltd Vs C.C.E. & S.T.-Daman

Facts – 

• The Appellant, Vertellus Specialty Materials India Pvt Ltd, had exported their final products of chapter 29 of CETA, 1985 and had preferred three refund claims, in respect of accumulated Cenvat Credit under the provisions of Rule 5 of Cenvat Credit Rules, 2004 on the ground that they were not in a position to utilize the cenvat credit of duty paid on raw materials.
• The department noticed several discrepancies in respect of the said claims and consequently issued three Show Cause Notices proposing to reject the claims.

Issue – 

• Whether the appellant is entitled to refund of accumulated Cenvat Credit?

Order – 

• The Tribunal observed that in the present matter it is not in dispute that entire refund claim in question had been filed under Rule 5 of the rules, which is a beneficial provision for manufacturer who cleared final product or intermediate product for export without payment of duty under bond, etc.
• Proviso to Rule5 imposes a restriction that no refund or credit shall be allowed if the manufacturer avails of drawback claim or claims rebate of duty. In the present case, there is no dispute that the appellant had exported the goods without payment of duty, further, there is no dispute that the appellants have not availed the drawback or rebate of duty, hence the refund of credit shall be allowed, as the amount cannot be adjustable against clearance of home consumption or for export on payment of duty.
• Hence it was held that appellant will be eligible for refund of accumulated credit under Rule5 of CCR and notifications issued there under subject to the various conditions of that Rule and related notifications being satisfied.
• The impugned order is set aside and the matter is remanded to the adjudicating authority to decide the refund claims afresh after, taking into consideration our above observations/findings and after affording an opportunity of hearing to the appellant.