2017 (12) TMI 141 - AT - Central Excise

Cash refund of unutilized CENVAT credit - whether the Appellants are entitled to cash refund of the unutilized CENVAT credit availed on various capital goods lying in balance as on the date 30.3.2009 under Rule 5 of CENVAT Credit Rules, 2004 since the Appellants had adopted the benefit of N/N. 30/2004-CE dated 9.7.2004, and later the factory was closed? - Held that - identical issue decided in the case of M/s Scan Synthetics Limited Versus CCE, Jaipur- I 2016 (6) TMI 316 - CESTAT NEW DELHI , where it was held that In the absence of any provision specifically permitting the refund of such credit, in cash, the same cannot be allowed on the basis of equity, justice and good conscious - cash refund cannot be allowed - appeal dismissed - decided against appellant.

Summary

Issues:
1. Entitlement to cash refund of unutilized CENVAT credit on capital goods under Rule 5 of CENVAT Credit Rules, 2004.

Analysis:
The judgment in question pertains to an appeal against the Order-in-Appeal passed by the Commissioner of Customs (Appeals), Central Excise, Ahmedabad I. The central issue revolves around the entitlement of the Appellants to a cash refund of the unutilized CENVAT credit availed on various capital goods as of a specific date under Rule 5 of the CENVAT Credit Rules, 2004, following the adoption of Notification No.30/2004-CE dated 9.7.2004 and subsequent closure of the factory.

The Advocate for the Appellants argues that due to switching over to exemption and the subsequent closure of their factory, they were unable to utilize the CENVAT credit on capital goods, which should, therefore, be refunded in cash. Reference is made to the decision of the Tribunal in a specific case to support this argument.

On the other hand, the Advocate for the Revenue contends that the issue has been settled by a Larger Bench decision of the Tribunal in a prior case, which has set a precedent for similar situations. This decision has been followed in subsequent cases, emphasizing the limitations on cash refunds of accumulated credit under the Modvat law.

The judgment delves into the legal principles established by the Larger Bench of the Tribunal in the Steel Strips case, emphasizing the strict requirements for granting cash refunds of unutilized credit. The Tribunal's decision in a related case is also cited to underscore the importance of adhering to precedents set by higher judicial authorities and the limitations imposed by statutory provisions.

Ultimately, the Tribunal, following the precedents and legal principles established, rules in favor of the Revenue, upholding the impugned order and dismissing the appeal. The judgment underscores the significance of legal interpretations, precedents, and adherence to established principles in deciding matters related to cash refunds of accumulated credit under the CENVAT Credit Rules, 2004.