2013 (1) TMI 383 - HC - Central Excise

Power to grant refund - Jurisdiction - Refund claim - Whether while granting refund under Rule 5 of CCR, 2004 of unutilized CENVAT Credit by Additional Commissioner without recording that he is exercising power u/s 12E can be a ground for order without jurisdiction - Section 11B of the Central Excise Act, 1944 - powers u/s 12E of the Central Excise Act, 1944 - Held that - It is not the requirement of Section 12B that the Additional Commissioner would have jurisdiction to grant refund of unutilized credit of duty paid on input only if the said section is specifically mentioned in the order. Therefore, no fault could be found with the order passed by the Additional Commissioner merely because the said order does not refer to Section 12B. Therefore, granting refund of unutilized input credit is allowed. In favour of assessee

Summary

Issues:
Jurisdiction of Additional Commissioner to grant refund under Rule 5 of Cenvat Credit Rules, 2004 in light of Section 11B of the Central Excise Act, 1944.

Analysis:
1. The case involved a substantial question of law regarding the jurisdiction of the Additional Commissioner of Central Excise to sanction and grant a refund under Rule 5 of the Cenvat Credit Rules, 2004, in relation to Section 11B of the Central Excise Act, 1944.

2. The Additional Commissioner had initially sanctioned a refund of unutilized credit of input and input service under Rule 5 of the Cenvat Credit Rules, 2004. However, the Revenue challenged this decision before the Commissioner (Appeals), who set aside the order, citing that the Additional Commissioner lacked the power to grant such a refund under Section 11B.

3. Subsequent appeals were filed by the assessee, contending that the Additional Commissioner could indeed exercise the powers under Section 11B through Section 12E of the Central Excise Act, 1944. The CESTAT upheld the Commissioner (Appeals) decision, noting that the Additional Commissioner did not explicitly mention the exercise of powers under Section 12E in the order.

4. The High Court analyzed the situation and clarified that the Additional Commissioner, under Section 12E, could grant a refund of unutilized credit of duty paid on inputs. The absence of a specific mention of Section 12E in the order did not invalidate the jurisdiction of the Additional Commissioner to grant the refund. The court emphasized that Section 12E did not necessitate explicit reference in the order for the Commissioner to have the authority to grant such a refund.

5. Consequently, the High Court quashed the orders of the Commissioner (Appeals) and the CESTAT, upholding the original order of the Additional Commissioner granting the refund of unutilized input credit. The court affirmed that the Additional Commissioner had the jurisdiction to grant the refund under the applicable provisions.

6. In conclusion, all appeals were allowed, and the orders of the lower authorities were set aside, with no costs imposed on either party. The judgment clarified the jurisdictional aspect and affirmed the validity of the refund granted by the Additional Commissioner.