2023 (6) TMI 540 - AT - Central Excise

Cash Refund - pre-deposit amount deposited through Cenvat Credit - refund claimed on the ground that appellant working under exemption notification 30/2004-CE, dt. 9.7.2004 and hence not able to utilize the Cenvat Credit - HELD THAT - The issue is no more res integra and Hon ble High Courts and this Tribunal in the matters of COMMISSIONER OF CENTRAL EXCISE VERSUS BIRLA TEXTILE MILLS 2010 (10) TMI 1061 - DELHI HIGH COURT ; M/S. K.G. DENIM LTD. VERSUS CUSTOM, EXCISE SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE 2017 (7) TMI 22 - MADRAS HIGH COURT , M/S LAV KUSH TEXTILES VERSUS THE COMMISSIONER, CENTRAL EXCISE, JAIPUR 2017 (5) TMI 1021 - RAJASTHAN HIGH COURT , M/S. RAYMOND LTD. VERSUS CCE MUMBAI III 2011 (6) TMI 530 - CESTAT, MUMBAI , time and again have held that when the assessee is not in a position to utilize the credit, the amount is permitted to be refunded in cash although the same has been paid through their Cenvat Credit account. In the instant matter the appellant herein has requested for cash refund on the ground that they are working under exemption notification 30/2004-CE, dt. 9.7.2004 and hence not able to utilize the Cenvat Credit. Therefore the appellant is entitle for the cash refund. In view of totality of the facts involved herein viz. that the basis of issuing the show cause notice and of passing of the orders by both the authorities below has gone alongwith the fact that the Order-in-Original sanctioning the refund in cash has not been challenged by the Revenue coupled with the fact that the issue involved herein is no more res integra as discussed. The impugned order is set aside and the appeal filed by the appellant is allowed.

Summary

Issues Involved:
The judgment involves the issue of refund arising from a Tribunal order, challenge by Revenue, and cash refund eligibility based on exemption notification.

Refund Issue:
The appellant filed for a refund of Rs.50 lakhs pre-deposited during appeal proceedings. The refund application was initially rejected but later partially allowed by different authorities. A show cause notice was issued to recover the refunded amount after a challenge by Revenue, which was withdrawn later. The Tribunal found that the basis for the notice and orders had ceased to exist with the withdrawal of the appeal, and the cash refund was not challenged by Revenue, thus allowing the refund in cash to the appellant.

Cash Refund Eligibility:
The Tribunal considered whether cash refund of the pre-deposit amount, paid through Cenvat Credit, was permissible. Citing precedents like CCE vs. Birla Textile Mills and others, it was established that when the assessee cannot utilize the credit, cash refund is allowed. The appellant's request for cash refund, citing exemption notification, was deemed valid. The Tribunal concluded that the appellant was entitled to the cash refund based on the exemption and inability to utilize Cenvat Credit.

Conclusion:
Considering the withdrawal of the Revenue's appeal, the lack of challenge to the cash refund order, and the established precedent for cash refunds in similar cases, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, granting consequential relief.