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2007 (9) TMI 47 - AT - Central ExciseCenvat/Modvat - Appellant entitle for cash refund of unutilised Cenvat credit only when there is no deliberate attempt on the part of appellant to utilise PLA for payment of duty inspite of sufficient balance in the Cenvat credit account - Tribunal found no deliberate attempt and allowed the refund
Issues:
1. Refund of unutilized Cenvat credit due to final product exemption. 2. Compulsion to pay from PLA instead of Cenvat account. 3. Applicability of the decision in the case of M/s. Gauri Plasticulture. Analysis: 1. The appellant, a computer manufacturer, sought a cash refund of Rs. 9,27,152/- from their unutilized Cenvat credit due to their final product being fully exempted from duty. The Original Authority and the Commissioner (Appeals) denied the refund, citing no provision for such refunds. 2. The appellant argued that they were compelled by Excise authorities to make payments in PLA instead of utilizing their Cenvat credit. They provided details of being instructed to pay from PLA despite having sufficient credit balance. The Tribunal noted fixed amounts paid in PLA at the request of authorities, indicating compulsion to help revenue mobilization efforts. The Tribunal held that the appellant was forced to pay from PLA, entitling them to a cash refund. 3. The Tribunal referenced the decision in the case of M/s. Gauri Plasticulture, where it was established that if an assessee is unable to utilize credit due to departmental objections or actions, leading to cash payments, a refund is warranted upon dispute resolution. The Tribunal emphasized the principle of equity and justice, allowing refunds for credits used due to departmental restrictions. In line with this precedent, the Tribunal allowed the appeal, granting consequential relief to the appellant. This detailed analysis of the judgment highlights the issues of refunding unutilized Cenvat credit, compulsion to pay from PLA, and the application of legal precedents in determining the appellant's entitlement to a cash refund.
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