2015 (2) TMI 131 - AT - Central Excise

Cash refund of unutilized CENVAT Credit - Surrender of excise registration - Held that - There is no dispute about the fact that the appellants discharged their duty liability during the period 2006-2007 to 2009-2010 either by way of payment through Cenvat credit or also by way of cash. This might have resulted in accumulation of Cenvat credit. However, the payments made towards the duty in cash, were proper and appropriated payment at that point of time. The assessment in respect of same also stand finalized. As such, at the end of the day, when the appellant is closing its factory, it has claimed refund of payment made in cash during preceding financial year on the ground that the same should be adjusted against the available credit at the time of closure of the factory. First of all, we are not aware as to whether such credit was also available at the relevant time when the appellants made the payment in cash. Secondly, the appellants having made the payments in cash without any protest, even when there was credit available at the relevant time, cannot be allowed to take U turn at the end of closure of their factory. And thirdly, the assessment having been finalized cannot be opened after a period of 4 to 5 years so as to allow the assessee to make a claim of adjustment of cash payment with the credit available. I also find that Tribunal in the case of Swaran Steel Industries v. CCE, Chandigarh reported as 2009 (1) TMI 623 - CESTAT, NEW DELHI has held that there is no provision for cash refund of the unutilized Cenvat credit at the time of surrender of registration certificate on closure of unit. - Decided against assessee.

Summary

Issues:
Refund claim of unutilized Cenvat credit at the time of surrendering registration.

Analysis:
The appellant, engaged in manufacturing excisable products, sought a refund of unutilized Cenvat credit amounting to Rs. 4,42,489 at the time of surrendering their excise registration in 2009. The appellant had discharged duty liability using Cenvat credit, cash, or PLA during 2006-2007 to 2009-2010. The appellant argued that duty paid in cash should be adjusted against available credit upon factory closure, seeking a refund for cash payments made earlier.

During adjudication, the appellant contended that the duty paid in cash should have been adjusted against the available Cenvat credit, effectively seeking a refund for cash payments. However, lower authorities rejected the refund claim, leading to the present appeal. The appellant's argument was based on the premise that the cash payments made earlier should have been offset against the available credit balance, eliminating any remaining credit.

The Tribunal noted that while the appellant had indeed discharged duty using various methods, including cash payments and Cenvat credit, the payments made in cash were proper and finalized assessments existed for those transactions. The Tribunal highlighted that allowing the appellant to claim a refund for cash payments made earlier, especially after the closure of the factory, would be unjustifiable. Additionally, the Tribunal referenced a previous case to support the decision that there is no provision for cash refund of unutilized Cenvat credit upon surrendering a registration certificate upon unit closure.

Ultimately, the Tribunal found no merit in the appeal and rejected it. The decision was based on the lack of evidence regarding the availability of credit at the time of cash payments, the appellant's acceptance of making cash payments without protest, and the finalized assessments for the transactions in question. The Tribunal's ruling emphasized the importance of adhering to established procedures and limitations regarding refund claims related to Cenvat credit upon the closure of a manufacturing unit.