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2019 (7) TMI 1204 - HC - Central ExciseRefund in cash of CENVAT credit - Whether cash refund is permissible in terms of clause (c) to the proviso to section 11B(2) of the Central Excise Act, 1944 where an assessee is unable to utilize credit on inputs? - Whether by exercising power under Section 11B of the said Act of 1944, a refund of unutilized amount of Cenvat Credit on account of the closure of manufacturing activities can be granted? - Whether what is observed in UOI VERSUS SLOVAK INDIA TRADING CO. PVT. LTD. 2007 (1) TMI 556 - SC ORDER can be read as a declaration of law under Article 141 of the Constitution of India? - HELD THAT - Larger Bench of this Court in this case 2019 (6) TMI 820 - BOMBAY HIGH COURT disposed of all the three questions referred to it by Division Bench of this Court by answering the same in favour of the Revenue and against the Assessee. In the above view, it is an admitted position before us substantial questions of law in Central Excise Appeal Nos.13 of 2007 and 257 of 2007 are answered in favour of the Revenue and against the Assessee.
Issues Involved:
1. Whether cash refund of unutilized credit is permissible under Section 11B of the Central Excise Act, 1944. 2. Whether an assessee is entitled to a refund of unutilized amount of Central Credit on account of the closure of manufacturing activities. 3. Whether the observations in a specific court order can be considered a declaration of law under Article 141 of the Constitution of India. Analysis: 1. The first issue revolves around the permissibility of cash refund of unutilized credit under Section 11B of the Central Excise Act, 1944. The appeal questioned whether the Tribunal erred in holding that cash refund is not allowed when the appellants were not compelled to raise debit from PLA. Additionally, it was debated whether unutilized credit is refundable under Section 11B in the absence of any express prohibition for such cash refund. The Larger Bench of the Court, in response to similar questions, ruled in favor of the Revenue and against the Assessee, thereby establishing that cash refund is not permissible in such scenarios. 2. The second issue pertains to the entitlement of an assessee to a refund of unutilized Central Credit due to the closure of manufacturing activities. The query was whether a refund of unutilized credit on inputs can be granted under Section 11B of the Central Excise Act, 1944, when an assessee is unable to utilize such credit. The Larger Bench of the Court, in a consolidated decision, answered in favor of the Revenue and against the Assessee, concluding that such refunds are not permissible. 3. The final issue raised the question of whether certain observations in a specific court order can be considered a declaration of law under Article 141 of the Constitution of India. The Court disposed of all three questions referred to it by a Division Bench, answering them in favor of the Revenue and against the Assessee. Consequently, the appeals were resolved by affirming the decisions in favor of the Revenue and against the Assessee based on the rulings of the Larger Bench, thereby settling the legal position on the issues at hand. This comprehensive analysis of the judgment from the Bombay High Court provides insights into the legal interpretations and conclusions reached on the various substantial questions of law raised in the appeals before the Court.
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