2016 (12) TMI 528 - AT - Central Excise

Unjust enrichment - duty paid twice initially on 31.03.1999 and later between 05.07.1999 to 15.07.1999 - refund allowed by way of credit in the Cenvat account - whether the refund allowed by way of credit in CENVAT account justified or the refund should have been made in cash? - Held that - reliance placed on the decision of the case of Gauri Plasticulture (P) Ltd Vs CCE Indore 2006 (8) TMI 225 - CESTAT, MUMBAI , where similar issue was decided and it was held that When right to refund does not accrue under law, claim thereof is inconceivable - it is very much clear that the refund cannot be allowed in cash. I do not find any discrepancy in the impugned order. Consequently, the impugned order is upheld and the appeal, being devoid of merit, is dismissed - decided against appellant-assessee.

Summary

Issues involved:
- Entitlement to refund amount in cash instead of credit in CENVAT account.

Analysis:
1. Refund Claim Rejection and Appeal: The appeal was filed against the rejection of a refund claim for duty paid twice, initially on 31.03.1999 and later between 05.07.1999 to 15.07.1999. The Commissioner (Appeals) allowed a refund of &8377; 3,42,195/- by crediting it to the Appellant's Cenvat account, leading to the current appeal.

2. Appellant's Contentions: The Appellant argued that since their factory had been closed since 2003 and excise registration surrendered, the CENVAT credit account was inactive. They contended that refund should be in cash, citing precedents like Kochar Sung-up Acrylic Ltd, Ramji Packaging Pvt. Ltd, Lohia Polyester Pvt. Ltd, and Bangalore Cables Pvt. Ltd. The Appellant distinguished the Steel Strips case, stating that the nature of credit changes when utilized for duty payment.

3. Revenue's Arguments: The Revenue opposed cash refund, referring to Gauri Plasticulture (P) Ltd case where cash refund was not universally allowed. They emphasized the absence of provisions for cash refund in CENVAT Credit Rules except for exports. The Revenue challenged the validity of precedents cited by the Appellant, highlighting the Steel Strips case and Supreme Court's decision in Purvi Fabrics & Texturise P Ltd case.

4. Judgment Analysis: The Tribunal analyzed the Larger Bench's decision in the Steel Strips case, which emphasized that refund in cash is not permissible except for export cases. The Tribunal also cited the Purvi Fabrics & Texturiser (P) Ltd case, reiterating that CENVAT Credit Rules do not provide for cash refunds except for exports. The Tribunal upheld the impugned order, dismissing the appeal as devoid of merit, and affirmed that refund cannot be allowed in cash, aligning with the principles established in previous decisions.

In conclusion, the Tribunal upheld the decision to credit the refund amount to the CENVAT account, emphasizing the statutory provisions and precedents that restrict cash refunds except in specific export scenarios. The judgment reaffirmed the legal framework governing refund claims and the limitations on cash refunds under the Central Excise Act and CENVAT Credit Rules.