2014 (7) TMI 525 - AT - Central Excise

Claim of cenvat credit refund in cash - whether an amount paid by debiting cenvat credit from RG 23A Part II can be refunded in cash subsequently when appellant s factory is closed - Held that - In absence of express provision to grant refund, that is difficult to entertain except in the case of export. There cannot be presumption that in the absence of debarment to make refund in other cases that is permissible. Refund results in outflow from treasury, which needs sanction of law and an order of refund for such purpose is sine qua non. Law has only recognized the event of export of goods for refund of Modvat credit as has been rightly pleaded by Revenue and present reference is neither the case of otherwise due of the refund nor the case of exported goods. Similarly absence of express grant in statute does not imply ipso facto entitlement to refund. So also absence of express grant is an implied bar for refund. When right to refund does not accrue under law, claim thereof is inconceivable - Following decision of Steel Strips vs. CCE Ludhiana 2012 (8) TMI 565 - CESTAT, NEW DELHI - Decided against assessee.

Summary

Issues: Cash refund admissibility for payments made from RG-23 Part II.

Analysis:
1. Issue of Cash Refund Admissibility: The appeal was filed against the rejection of cash refund for an amount initially paid from RG-23 Part II. The appellant argued citing various case laws supporting cash refund for such payments. However, the Revenue contended that a Larger Bench judgment in the case of Steel Strips vs. CCE, Ludhiana set a precedent against cash refunds in such cases. The Tribunal examined the issue in light of precedents and legal provisions.

2. Judicial Precedents: The Tribunal considered the judgments cited by the appellant, including Gauri Plastics (P) Limited and UOI vs. Slovak India Trading Company Pvt. Limited, which supported cash refund if the credit was unutilized and available in records at factory closure. However, the Larger Bench of CESTAT, Delhi in Steel Strips vs. CCE Ludhiana held that refund without an express provision is not permissible except for exports. The Tribunal emphasized that absence of explicit grant implies a bar for refund, and refund is only allowed for export of goods, not for other reasons.

3. Legal Interpretation: The Tribunal analyzed the legal position and highlighted that the law requires a specific provision for refund, especially for unadjusted amounts. It emphasized that refund necessitates legal sanction and cannot be presumed without statutory authorization. The judgment clarified that equity and good conscience do not apply in fiscal matters, and refunds are strictly governed by statutory provisions. Therefore, the Tribunal concluded that no cash refund for payments from RG-23A Part II could be granted to the appellant, as per the ruling of the Larger Bench.

4. Decision: Based on the legal interpretation and precedent set by the Larger Bench, the Tribunal rejected the appellant's appeal for cash refund, as no payments were made from PLA after utilizing the credit from RG-23A Part II. The judgment was pronounced on 14.2.2014, upholding the decision to deny cash refund in this case.