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 Cir. No. E-15(a)/07/2007                                                                                                 2nd May 2007

 

TO ALL MEMBERS OF THE ASSOCIATION

 

Dear Member,

We reproduce  a copy  of  instruction  dated  22^nd March 2007  issued   by   Central  Board of Excise & Customs,  Ministry of Finance,  Department  of Revenue, New Delhi.

Quote

Sub : Refund of  unutilized credit of Additional Duty of Excise ( T & TA) and its admissibility under Rule  S of CENVAT  Credit  Rules by application of Board Circular No: 701 /17/ 2003 –CX   dated  12.03.2003.

Attention is invited to the Board’s Circular No: 701 /17/2003-CX dated 12.3.2003 wherein it was clarified that the refund of AED ( GSI) is allowed under Rules of the CENVAT  Credit Rules :2002 regardless of the fact that the said duty is not leviable on the finished products. The Board has received  numerous  references   from the  field formations as  well  as from the trade, seeking clarification on  whether  the refund of AED ( T & TA ) is   allowed  on similar lines for export of  goods.

2. The issue has been examined.  It is seen that in terms of the CENVAT Credit Rules 2002 and the subsequent rules  notified  on 2004, CENVAT Credit  of specified duty paid on  inputs is  admissible  provided they are  used  in the manufacture of  excisable goods  other  than exempted  goods. Exempted goods  are defined as  goods  which  are exempted  from the whole of duty of  excise leviable  thereon  and  include  goods which are  chargeable  to  Nil rate  of  duty.   Consequently, the credit of  duty  paid  on the  inputs is  admissible  only  when  the  final product is  exempted  from the  duty of  excise  leviable  thereon  under the  section  2  of the Central Excise Act 1944. If the  final product  is  not chargeable  to AED, it   cannot  be  said  that the final product is  exempted  from the excise  duty. Further, the  condition relating  to the  restriction  on the utilization of  such  credit  lays  down  that the  Credit Taken  of AED ( T& TA) can be utilized only for the payment of AED ( T& TA).  It is therefore, observed that as per the Rule 3 of  the said  rules, CENVAT Credit if AED ( T & TA) can be taken even though the manner  of utilization of  such  credit  is  restricted  in terms  of sub rule(2).

Therefore  such unutilized credit of AED ( T& TA) can be claimed as refund under rules 5 of the CENVAT credit Rules / 2004 on export of goods.Accordingly, it is clarified that clarification  issued  for the refund  of AED (GSI) under rule 5 of the CENVAT Credit Rules 2002  vide Boards Circular no 701 /17/2003-CX  dated  12.02.2003 will  be  applicable  to  AED ( T & TA)  Subject  to the conditions  and  limitations  as  prescribed  under the  said rules

3. The Field  formations  may be  instructed  suitably.

Unquote 

This is for the information of Members.

Thanking  you,

 
Yours  truly,

P. Chandrasekharan

Secretary