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Urgent - Cenvat credit refund under Rule 5 of CCR, 2004

CS Kruti Parekh (Company Secretary) (30 Points)

27 January 2011

Dear Members,

A manufacturer can take credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1985, passed on by an importer of goods on the inputs purchased by such manufacturer.

Can anybody pls. urgently tell me whether the manufacturer (100% EOU) taking credit of such additional duty of customs can claim refund of such duty under Rule 5 of Cenvat Credit Rules, 2004.

An immediate response on the matter will be highly appreciated.

Thanks in anticipation.

Regards,

CS Kruti Parekh

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5 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 27 January 2011

Rule 5 of cenvat credit rules 2004 is not independent but adhared with rule 18 of excise rules 2002, and in rule 18 its available to take rebate of duty paid on export consignment.

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 27 January 2011

CENVAT CREDIT RULES 2004

RULE 11(7) The provisions of this rule shall apply mutatis mutandis to goods supplied by a first stage dealer or a second stage dealer :

[Provided that in case of the first stage dealer receiving imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of the said imported goods, indicate on the invoice issued by him that no credit of the additional duty levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;

shushantsinghal (BCOM(HONS),C.A) (283 Points)
Replied 27 January 2011

under rule 3(1) of cenvat credit rules 2004 , a manufacturer is allowed to take the credit of addtional duty of custom leived u/s 3(5) of custom act & since it is eligible cenvat credit manufacturer can take the refund of cenvat credit IN RULE 5A only if such MANUFACTURED GOODS ARE EXPORT in rule 19 of CER,2002 .........

CS Kruti Parekh (Company Secretary) (30 Points)
Replied 28 January 2011

Thanq for ur response.

But we are do not want to claim refund under Rule 5A of CCR, 2004. We wish to claim refund under Rule 5.

Further, the manufacturer in this case is a 100%EOU. So all the goods are exported under bond and not under rebate claim.

Kindly let me know whether in this case we can claim refund under Rule 5, of such additional duty passed on by importer on inputs used in goods exported by us.

Thanq You,

CS Kruti Parekh

Vijay Soni (Accouts Manager) (32 Points)
Replied 28 January 2011

Originally posted by : Kruti Parekh
	Thanq for ur response. But we are do not want to claim refund under Rule 5A of CCR, 2004. We wish to claim refund under Rule 5. Further, the manufacturer in this case is a 100%EOU. So all the goods are exported under bond and not under rebate claim. Kindly let me know whether in this case we can claim refund under Rule 5, of such additional duty passed on by importer on inputs used in goods exported by us. Thanq You, CS Kruti Parekh

Off course you can claim refund under Rule 5. Though the word 100% EOU is no more, it is just EOU, there will be difference in proceedure otherwise you can definately calim refund of Addl Duty passed by the importer.