2022 (5) TMI 748 - AT - Central Excise

Refund of accumulated CENVAT Credit - accumulated credit at the time of closure of unit of the assessee - HELD THAT - In SHRI VITTHALSAI SSK LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, NAGPUR 2019 (12) TMI 390 - CESTAT MUMBAI , the Tribunal had also rejected such claim for refund of credit that had accumulated in an undertaking taken over by the assessee themselves in the past. Refund cannot be granted - there is no merit in the grounds set out by the appellant for setting aside the order of the first appellate authority. Accordingly, the appeals are dismissed.

Summary

Issues involved:
- Refund of accumulated CENVAT credit on closure of unit
- Permissibility of cash refund under Section 11B of the Central Excise Act, 1944
- Applicability of previous court decisions on similar matters

Analysis:

The judgment by the Appellate Tribunal CESTAT Mumbai dealt with the issue of refund of accumulated CENVAT credit upon the closure of a unit. The appeal was against the order-in-appeal of the Commissioner of CGST and Central Excise, Nashik, which had set aside the refund of certain amounts that had accumulated in the CENVAT credit account at the time of unit closure. The Learned Authorized Representative pointed out that the issue had been addressed by the Hon'ble High Court of Bombay in a previous case, where it was decided that cash refund is not permissible in such cases. The Tribunal also referred to another case where a similar claim for refund was rejected. Based on these precedents, the Tribunal concluded that there was no merit in the grounds presented by the appellant, and therefore, the appeals were dismissed.

The key legal questions addressed in the judgment included whether cash refund is allowed under the proviso to Section 11B(2) of the Central Excise Act, 1944 when an assessee is unable to utilize credit on inputs, and whether a refund of unutilized CENVAT credit due to the closure of manufacturing activities can be granted. The Tribunal referred to the decision of the Hon'ble High Court of Bombay and answered these questions in the negative, stating that they must be answered against the assessee and in favor of the Revenue. Additionally, the Tribunal clarified that the previous order of the Hon'ble Supreme Court could not be considered a declaration of law under Article 141 of the Constitution of India.

In conclusion, the Tribunal relied on the precedents set by previous court decisions and rejected the appellant's claim for refund of accumulated CENVAT credit. The judgment highlighted the importance of adhering to established legal principles and interpretations in similar cases, ultimately leading to the dismissal of the appeals.