2017 (8) TMI 68 - AT - Central Excise

Refund claim - rejected on the ground that the demand for which they filed refund claims has already been held against them - whether the appellant is entitled to take refund claim of reversal of cenvat credit under protest which has not been appropriated at any stage or not? - Held that - it is admitted fact that the appellant reversed the cenvat credit under protest which was never appropriated by any authorities at any stage. In that circumstance, without appropriation of the said amount by the authorities below, the same was remained as deposit - in the light of the decision of the Hon ble Apex Court in the case of Vikram Cements 2006 (1) TMI 130 - SUPREME COURT OF INDIA , the appellant was not required to reverse the said amount. In that circumstances, the appellant is entitled for refund of the said amount - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of cenvat credit on inputs/capital goods used in mines by a cement manufacturer.
2. Rejection of refund claims by the authorities.
3. Appropriation of the amount paid under protest.
4. Entitlement to refund claim without appropriation of the amount.
5. Interpretation of Central Excise Rules regarding appropriation of duty paid under protest.

Analysis:
1. The appellant, engaged in cement manufacturing, availed cenvat credit on inputs/capital goods used in mines. The authorities denied the credit, stating that the mines were not part of the factory. A show cause notice was issued for the period July 2001 to March 2004, resulting in the denial of cenvat credit, which was confirmed. The appellant appealed to the Commissioner (A) but was unsuccessful. For the period April 2004 to September 2004, the appellant reversed the credit under protest and informed the department.

2. Subsequently, based on a Supreme Court decision allowing cenvat credit for inputs/capital goods used in mines by cement manufacturers, the appellant filed refund claims. However, the claims were rejected on the grounds of not keeping the issue alive. The appellant challenged these rejections.

3. The core issue was whether the appellant was entitled to a refund claim for the reversed cenvat credit that was never appropriated by the authorities. The Tribunal found that since the amount remained as a deposit without appropriation, and considering the Supreme Court decision, the appellant was entitled to the refund.

4. The Tribunal distinguished a previous case cited by the respondent where the amount paid under protest was appropriated, stating that the facts were different. Referring to the Central Excise Rules, it highlighted that the amount paid under protest had not been appropriated at any stage, making it a deposit with the department, thus supporting the appellant's entitlement to the refund claim.

5. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief. The judgment emphasized the importance of appropriation of duty paid under protest as per the Central Excise Rules, ultimately ruling in favor of the appellant's entitlement to the refund claim.