2017 (3) TMI 294 - AT - Central Excise

Cash refund - CENVAT credit lying unutilised - closure of factory - Section 11B of the CEA, 1944 - Held that - the decision in the case of Slovak India Trading Co. Pvt. Ltd. Versus Commissioner of Central Excise, Bangalore 2005 (8) TMI 273 - CESTAT, BANGALORE , is applicable in the present case as the issue is similar, where it was held that this Tribunal was justified is ordering refund of unutilized Cenvat credit lying in balance when the manufacture in the unit was closed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against rejection of refund claim of unutilized Cenvat credit.
2. Interpretation of Section 11B of the Central Excise Act, 1944.
3. Application of legal precedents in the case.

Analysis:
1. The appeal was filed by Revenue against the rejection of a refund claim of unutilized Cenvat credit by the Commissioner of Central Excise & Customs (Appeals), Noida. The appellant, engaged in manufacturing Connector Harness & Parts falling under chapter No. 85, sought a refund due to the closure of their factory. The Order-in-Original rejecting the claim was challenged by the appellant, citing legal precedents such as the ruling of the Hon'ble High Court of Karnataka in a specific case. The Tribunal noted that the appellant failed to establish that the legal precedent cited was not applicable to the present case, leading to the dismissal of the appeal by Revenue.

2. The dispute involved the interpretation of Section 11B of the Central Excise Act, 1944, which outlines the conditions for refunding Cenvat credit. The Revenue argued that the section does not permit cash refunds of Cenvat credit unless the inputs or input services are exported or used in manufacturing goods for export. They contended that the accumulation of Cenvat credit in the present case was not due to exports. However, the Tribunal found that the legal precedent cited by the appellant supported the refund claim based on the closure of the manufacturing unit, as affirmed by the Hon'ble Supreme Court of India.

3. The Tribunal considered the application of legal precedents, specifically referencing the ruling of the Hon'ble High Court of Karnataka in a previous case involving a similar refund claim. The Tribunal highlighted that the legal precedent relied upon by the appellant had been upheld by the Hon'ble Supreme Court of India, indicating its relevance and applicability to the present case. Consequently, the Tribunal dismissed the appeal by Revenue, upholding the decision of the Commissioner (Appeals) to allow the refund claim. The respondent was granted consequential relief as per the law.

This detailed analysis of the judgment provides insights into the legal reasoning and application of precedents in resolving the issues raised in the appeal against the rejection of the refund claim of unutilized Cenvat credit.