2010 (1) TMI 535 - AT - Central Excise

Cash refund availing the benefit of notification No. 50/03 Part of refund in cash and remaining by way of credit - they are not in a position to utilize the refund allowed by way of credit - Rule 5 of Cenvat Credit Rules, 2004 read with Section 11B Held that - appellant is very much in business and in fact are availing the benefit under notification No. 50/2003 - cash refund was allowed when the factory has ceased to function and registration has been surrendered - not a case where the appellant is covered by Rule 5 of the Cenvat Credit Rules as credit was not lying unutilised due to export Cash refund not allowed.

Summary

Issues:
1. Whether the appellant should have reversed the credit attributable to inputs and capital goods.
2. Whether the appellant is entitled to a cash refund instead of credit.

Issue 1:
The appellant, a steel ingot manufacturer, availed the benefit of a notification and reversed a sum from Cenvat credit while also paying a sum towards Cenvat credit on inputs in finished goods stock. The dispute on reversing the credit was settled in favor of the appellant by the Tribunal's Final Order. The appellant filed a refund claim, which was partly granted in cash and partly as credit. The appellant sought a cash refund of the remaining amount. The Advocate argued invoking Rule 5 of Cenvat Credit Rules, 2004, along with Section 11B to implement the Tribunal's order for cash refund. The Advocate cited various decisions supporting cash refund in similar situations. The Tribunal found no valid reasons to interfere with the order of the Commissioner (Appeals) and rejected the appeal.

Issue 2:
The Tribunal analyzed the appellant's request for a cash refund instead of credit. The Advocate relied on past judgments where cash refunds were allowed in specific circumstances. The Tribunal noted that the appellant was still in business and availing benefits under a specific notification allowing the option to opt out of exemption. As the appellant had a balance in the Cenvat credit account when opting for the notification's benefit, the Tribunal found the decision of the Tribunal dated 10-1-2008 had been implemented. The Tribunal determined that the provision for refund of the amount in the credit account was not applicable in this case as the credit was not unutilized due to export. The Tribunal concluded that the appellant did not provide valid reasons to interfere with the Commissioner (Appeals) order and hence rejected the appeal for a cash refund.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by both sides, and the Tribunal's reasoning in arriving at the decision to reject the appeal for a cash refund.