2009 (7) TMI 946 - AT - Central Excise

Summary

Issues involved: Stay petition against the order of the Commissioner sanctioning refund under Cenvat credit Rules due to stopping of manufacturing activity.

Summary:
The Appellate Tribunal CESTAT, New Delhi heard a stay petition filed by the department against the Commissioner's order sanctioning a refund of Rs. 20,85,030 from the Cenvat account of the respondents, who had stopped manufacturing activity and were unable to utilize the amount. The Jt. CDR contended that Rule 5 does not allow for a refund in such a situation and sought a stay on the order. On the other hand, the Advocate for the respondents argued that the Commissioner's order was in line with the Tribunal's decision in a previous case and a High Court decision, emphasizing that the recommendation to the Jurisdictional Authority before filing an appeal was not legal. After considering the submissions, the Tribunal found that the refund sanctioned by the Commissioner was prima facie against the provisions of Cenvat credit Rules, leading to the decision to stay the operation of the order until the appeal is disposed of.