2017 (2) TMI 143 - AT - Central Excise

Refund of balance of MODVAT credit - rule 5 of CCR - rejection on the ground that the said rule 5 is applicable only in relation to inputs procured for manufacture of goods that were exported - Time limitation - Held that - this proceeding is limited to determining whether the furnishing of stock register mandated by statute is sufficient evidence of credit having been properly availed - the stock register should suffice as proof of eligibility to avail credit is accepted. Reliance placed in the case of Punjab Beverages (P) Ltd v, Collector o Central Excise, Chandigarh 2000 (2) TMI 134 - CEGAT, COURT NO. I, NEW DELHI , where it was held that non-production of documents by the appellants will not come in their way of getting the refund of the duty. The original authority is directed to ascertain and process the claim accordingly - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of rules for refund of MODVAT credit remaining in balance at unit closure.
2. Relevance of limitation in filing refund claims under Central Excise Act, 1944.
3. Requirement of specific documents for sanction of refund.
4. Judicial precedents on refund of unutilized credit for closed units.
5. Sufficiency of stock register as evidence for availing credit.

Issue 1:
The dispute centered around the documents necessary for the sanction of refund of MODVAT credit remaining in the balance of the appellant at the time of unit closure. The appellant, a manufacturing unit, had a credit balance in the RG-23A register upon closure. The original authority rejected the claim citing that the rule for refund only applied to inputs for exported goods, the limitation under section 11B of the Central Excise Act, 1944, and failure to submit required documents.

Issue 2:
In appeal, it was argued that the limitation was not a valid ground for denial as it was not raised in the show cause notice. The first appellate authority acknowledged the eligibility of closed units to claim refunds of unutilized credit, citing judicial precedents. However, the authority upheld the rejection of refund due to the absence of original duty-paying documents for verification purposes.

Issue 3:
The appeal focused on whether the submission of a stock register was sufficient evidence of properly availed credit. Legal precedents, such as the decision in Punjab Beverages (P) Ltd v. Collector of Central Excise, Chandigarh, were cited to support the argument that non-production of documents should not hinder refund claims if the duty payment can be verified through other means.

Issue 4:
Several tribunal decisions, including Camlin Ltd v. Commissioner of Central Excise, Mumbai-III and Anil Products Ltd v. Commissioner of Central Excise, Ahmedabad, were referenced to highlight instances where the non-production of original documents did not impede refund claims. These cases emphasized the importance of verifying duty payments through alternative means when original documents were unavailable.

Issue 5:
Ultimately, the appellant's contention that the stock register should suffice as proof of eligibility to avail credit was accepted. The tribunal directed the original authority to process the claim based on the stock register as evidence. The appeal was allowed, and the decision was pronounced in court accordingly.