2016 (11) TMI 777 - AT - Central Excise

Refund claim - unutilized cenvat credit of ₹ 10,37,599/- lying in cenvat credit account - closure of factory - Held that - the issue in hand is squarely covered by the judgments cited and relied upon by the Revenue in the case of Steel Strips Vs. C.CE., Ludhiana 2011 (5) TMI 111 - CESTAT, NEW DELHI where it was held that 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 The appellants are not entitled to refund in cash of the cenvat credit lying unutilized in their books of account - appeal dismissed.

Issues:
1. Appeal against Order-in-Appeal rejecting refund claim of unutilized cenvat credit.
2. Appellants' reliance on Slovak India Trading Co. Pvt Ltd judgment.
3. Interpretation of Rule 5 and Rule 5A of the Cenvat Credit Rules.
4. Applicability of previous judgments cited by the Revenue.
5. Consideration of export as the sole basis for refund of unutilized credit.
6. Upholding the order of the Commissioner (Appeals) based on settled position.

Analysis:
1. The appellants appealed against the Order-in-Appeal rejecting their claim for a refund of unutilized cenvat credit amounting to ?10,37,599. Despite multiple notices, the appellants did not appear before the Tribunal, and the matter was adjourned to provide them with a last chance to appear. The brief facts revealed that the appellants surrendered their registration certificate after manufacturing goods under Chapter 72 and applied for cash refund of the unutilized cenvat credit following the closure of their factory.

2. The appellants based their claim on the judgment of Slovak India Trading Co. Pvt Ltd, upheld by the Karnataka High Court, but did not assert falling under the situations specified in Rule 5 and Rule 5A of the Cenvat Credit Rules allowing refund of unutilized credit. The Revenue, represented by the Ld. A.R., relied on various judgments, including Steel Strips Vs. C.CE., Ludhiana, to assert that the appellants were not entitled to a cash refund of the cenvat credit as per established legal precedents.

3. The Tribunal, after hearing the Ld. AR and reviewing the records, concurred with the Revenue's position. It highlighted that the issue at hand was conclusively settled by previous judgments cited by the Revenue, emphasizing the requirement for an express provision for refund, particularly in cases not related to exports. The Tribunal referenced the Larger Bench Tribunal's decision in the Steel Strips case, emphasizing the stringent conditions for refunding unutilized credit, primarily limited to cases of export.

4. The Tribunal reiterated that the absence of a statutory provision for refund implied a bar to such refunds in non-export cases. It emphasized that the right to a refund did not accrue under the law unless explicitly provided for, making the appellants' claim inconceivable in the absence of a legal basis. The judgment underscored that fiscal courts were not guided by equity, justice, or good conscience, unlike civil courts, and therefore ruled in favor of the Revenue based on the settled legal position.

5. In conclusion, the Tribunal upheld the order of the Commissioner (Appeals) rejecting the appellants' refund claim for unutilized cenvat credit, dismissing the appeal in line with the established legal principles and precedents cited by the Revenue.

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