2015 (10) TMI 1333 - AT - Central Excise

Denial of refund claim - CENVAT Credit - whether cash refund is required to be allowed to M/s Sit Flexible Hose Pvt Ltd for certain amount which were debited from the cenvat credit account - Held that - It is observed from the facts available that the present respondent debited certain amounts from their cenvat account during the period Sept. 2008 to Decmber2009. Subsequently, the credit reversed by the assessee was held to be admissible and was accordingly allowed in the cenvat account to the appellant. The credit so allowed was availed by the assessee and the same also started utilising the credit in the payment of central excise duty. It is also observed from the case records that at no stage Revenue insisted the assessee to pay the amount in cash. The case laws relied upon by the First Appellate authority in Para No 5 of OIA dtd 3.2.2011 pertains to the situations where liability was insisted by the Revenue to be paid from PLA and assessee was prevented from utilising cenvat credit. As the facts of the relied upon the case laws are different that the present facts the same can not be pressed into service to sanction the refund in cash. - Impugned order is set aside - Decided in favour of Revenue.

Summary

Issues:
1. Whether cash refund should be allowed to the appellant for the debited amount from the cenvat credit account.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal (OIA) where the First Appellate Authority sanctioned a cash refund to the appellant as they were unable to utilize the Cenvat Credit in the RG 23. The Authorized Representative for Revenue argued that the appellant had reversed a significant amount from their cenvat account, which was later deemed admissible. The Revenue contended that the appellant had availed the entire amount as evidenced by the excise duty return filed. It was highlighted that the appellant started utilizing the credit allowed. The Revenue's representative argued that the order by the First Appellate Authority was incorrect as the appellant was not directed to deposit the amount in cash, and their case did not fall under the relevant cenvat credit rules, especially regarding the accumulation of credit due to the export of finished goods.

During the hearing, no one appeared on behalf of the appellant. After hearing the arguments and examining the case records, the main issue revolved around whether a cash refund should be granted to the appellant for the debited amount from their cenvat credit account. It was noted that the appellant had debited certain amounts from their cenvat account during a specific period, and upon subsequent review, the reversed credit was found to be admissible. The appellant had utilized the credit and started using it for central excise duty payments. Notably, the Revenue had not insisted on the appellant to make a cash payment at any stage. The case laws cited by the First Appellate Authority were deemed inapplicable to the present situation, as those cases involved instances where the Revenue required payments from the Personal Ledger Account (PLA) and prevented the utilization of cenvat credit. As the circumstances differed from the relied-upon case laws, the refund in cash could not be granted based on those precedents.

The Tribunal concluded that the order of the First Appellate Authority needed to be set aside, and the appeal filed by the Revenue was to be allowed. Consequently, the appeal by the Revenue was allowed, leading to the decision in favor of the Revenue.