2014 (11) TMI 656 - HC - Central Excise

Denial of refund claim - Submission of photocopy of relevant documents - refund claim was with respect to Cenvat Credit in respect of input used in the manufacture of final product and in regard to which, a show cause notice for recovery of wrongly availed Cenvat Credit had been issued by the Commissioner - Held that - From the communication dated 26/5/2008, it can safely be communicated that it is a communication by the Deputy Commissioner, Central Excise, Division-III, Silvassa to the petitioner rejecting the refund applications on the ground that only photocopies of the documents mentioned in the said communication have been produced along with the application and also on the ground that with respect to the very same Cenvat Credit, show cause notice for recovery of wrongful availment of the Cenvat Credit amounting to ₹ 5,88,24,949/- has been issued by the Commissioner, Central Excise & Customs, Vapi dated 17/7/2007 mainly on the ground that the product viz. 123 Brand Mouth Freshners does not amount to manufacture. In the said communication it is specifically mentioned that Under the circumstances, you are not eligible for the refund of the Cenvat Credit under notification No.5/2006 CE (NT) dtd.14.03.2006 issued under Rule 5 of Cenvat Credit Rules, 2004. Therefore, the application along with photo copies of relevant documents is returned herewith. Under the circumstances, in view of the aforesaid communication dated 26/5/2008, no further order is required to be passed, as it can be said that the refund applications of the petitioner are as such decided. Under the circumstances, when it can be said that by communication dated 26/5/2008, the refund applications of the petitioner for Cenvat Credit have been rejected, there is no question of again directing the respondents to decide the refund applications. - Decided against assessee.

Summary

Issues:
1. Petitioner's prayer for a Writ of Mandamus or appropriate writ for refund claims.
2. Rejection of application under Rule 5 of Cenvat Credit Rules, 2002.
3. Dispute over rejection of refund applications.
4. Challenge regarding eligibility for Cenvat Credit refund.
5. Communication by Deputy Commissioner rejecting refund applications.
6. Disposal of the Special Civil Application.

Analysis:

1. The petitioner sought a Writ of Mandamus or appropriate writ to direct the respondents to decide refund claims of Rs. 71,22,270 and Rs. 17,08,758 in accordance with the law. The petitioner also requested the respondents to follow quasi-judicial procedure in handling the refund claims and provide an opportunity for the petitioner to be heard.

2. The Deputy Commissioner rejected the petitioner's application under Rule 5 of the Cenvat Credit Rules, 2002, stating that the petitioner was not eligible for the refund of the Cenvat Credit under a specific notification. The rejection was based on the grounds that only photocopies of documents were submitted and a show cause notice for recovery of wrongful Cenvat Credit had been issued.

3. The petitioner argued that the rejection communication was not a final decision but a Query Memo, emphasizing that the denial of Cenvat Credit should not be based on the pending show cause notice. The petitioner contended that the rejection was unjustified concerning the export of the final product under Bond or letter of undertaking.

4. The communication dated 26/5/2008 from the Deputy Commissioner clearly stated the rejection of the refund applications due to incomplete documentation and the pending show cause notice. The communication highlighted the reasons for ineligibility for Cenvat Credit refund under the specific notification.

5. The Court observed that the communication dated 26/5/2008 constituted a rejection of the petitioner's refund applications. As the rejection was already communicated, no further order was deemed necessary. The Court noted that the rejection communication was not challenged, and therefore, there was no basis to direct the respondents to reconsider the refund applications.

6. The Special Civil Application was disposed of, with the Court leaving open the option for the petitioner to challenge the rejection communication and decision dated 26/5/2008 in appropriate proceedings. The Court emphasized that it had not delved into the merits of the refund claims and advised the petitioner to seek appropriate reliefs through lawful channels when initiating proceedings.

This detailed analysis covers the issues raised in the judgment, providing a comprehensive understanding of the legal proceedings and the Court's decision.