2005 (8) TMI 607 - AT - Central Excise

Summary

Issues:
Claim for cash refund instead of Modvat credit for duty deposited in cash. Interpretation of Section 35F of Central Excise Act. Applicability of exemption notification and surrender of Central Excise Registration.

Analysis:
The case involved a dispute regarding the refund of duty deposited by the appellant in cash. The appellant contended that they should receive a cash refund instead of Modvat credit, as they were not operating under the Modvat scheme and the credit was of no use to them. The appellant relied on a previous Tribunal decision to support their argument. The Assistant Commissioner had sanctioned the refund by crediting the Modvat account of the appellant, which led to the present grievance.

The Tribunal, after considering the arguments presented, agreed with the appellant's contention. The Tribunal emphasized that the duty was deposited in cash by the appellant as per the provisions of Section 35F. Therefore, upon the success of the appeal, the duty should be refunded in cash only, especially when the appellant was not utilizing the Modvat scheme and the credit held no value for them. The Tribunal referred to the specific circumstances of the case, where the appellant was working under an exemption notification and had surrendered their Central Excise Registration, further supporting the claim for a cash refund.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The judgment provided consequential relief to the appellant by directing the refund of the duty deposited in cash. The decision was based on the interpretation of Section 35F of the Central Excise Act and the specific circumstances of the case, where the appellant's operational status under the Modvat scheme and the surrender of Central Excise Registration were crucial factors in determining the mode of refund.