2006 (10) TMI 58 - AT - Central Excise

Refund- Appellant demanded for cash refund of predeposit and not by way granting credit in their CENVAT account register- Matter remanded to Commissioner (Appeals) for fresh decision.

Summary

Issues:
Challenge to refund order by appellant company for credit in CENVAT account instead of cash.

Analysis:
The appellant challenged the order of the Commissioner (Appeals-II) upholding the refund of Rs. 99,319/- by crediting their CENVAT account and adjusting Rs. 50,880/- against Government dues. The appellant sought cash refund instead of credit in CENVAT account. The history of the case involves a demand of Rs. 1,50,199/- confirmed against the appellant with penalties under Central Excise Act. The Commissioner (Appeals) directed depositing the duty and penalty for appeal consideration. The Tribunal remanded the matter, leading to a demand of Rs. 25,440/- upheld by the Commissioner (Appeals). The appellant filed a refund claim for Rs. 1,55,199/-, out of which Rs. 50,880/- was adjusted, and the remaining amount was held admissible. The Commissioner (Appeals) ruled that refund should be made through credit in CENVAT account, citing Tribunal precedent and the CENVAT credit scheme provisions. The appellant argued that the product was non-excisable per a Supreme Court decision and that the refund should be in cash due to payment under Section 35F. The Authorized Representative contended that the appellant could utilize the revived Modvat credit against excisable goods removal, citing relevant case law and a recent Chapter Note addition. The Commissioner (Appeals) did not assess whether the appellant could utilize the credit before ordering the refund, leading to a remand for further examination of the Modvat credit availability and the impact of the Chapter Note.

The case highlights the dispute over the mode of refund for excise duty, involving the appellant's preference for cash refund over credit in their CENVAT account. The legal battle encompasses various stages of appeals, penalties, and compliance with deposit requirements. The Commissioner (Appeals) decision to grant refund through credit in CENVAT account is based on legal provisions and previous Tribunal rulings. The appellant's argument regarding non-excisable product and payment under Section 35F adds complexity to the case. The Authorized Representative's stance on utilizing revived Modvat credit and the impact of a recent Chapter Note further complicates the refund issue. The remand order emphasizes the need for a thorough examination of the appellant's ability to utilize the credit and the recent legal developments affecting the case. The judgment underscores the importance of legal compliance, precedent, and detailed analysis in matters of excise duty refunds.