2016 (7) TMI 83 - AT - Central Excise

Cash refund - duty remained unutilized in their cenvat credit account at the time of closure of the factory under Rule 5 of Cenvat Credit Rules, 2004 - Held that - The appellant is entitled to claim cash refund of unutilized amount of credit lying in their cenvat credit account at the time of closure of their factory on 31.10.2010 under Rule 5 of Cenvat Credit Rules, 2004 as relying on case of Union of India vs. Slovak Trading Co. Pvt. Ltd. (2006 (7) TMI 9 - KARNATAKA HIGH COURT ) wherein held that the respondent is entitled to get refund lying unutilized in their Cenvat credit account on the closure of their factory - Decided in favour of assessee .

Summary

Issues involved:
Entitlement to claim cash refund of duty remained unutilized in cenvat credit account at the time of factory closure under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:

Issue 1: Entitlement to claim cash refund of unutilized duty under Rule 5 of Cenvat Credit Rules, 2004
The Tribunal examined whether the appellant could claim a cash refund of the unutilized amount of credit in their cenvat credit account upon the closure of their factory. Referring to the decision of the Hon'ble Karnataka High Court in the case of Union of India vs. Slovak Trading Co. Pvt. Ltd., the Tribunal held that the appellant is indeed entitled to receive a refund of the unutilized amount in their cenvat credit account at the time of factory closure. The Tribunal emphasized that the decision of the Hon'ble Karnataka High Court prevails over the Tribunal's decision, thereby allowing the appellant's claim for a cash refund. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

Conclusion:
The judgment by the Appellate Tribunal CESTAT CHANDIGARH established that under Rule 5 of Cenvat Credit Rules, 2004, an appellant is entitled to claim a cash refund of the unutilized amount of credit in their cenvat credit account at the time of factory closure. The decision was based on the precedent set by the Hon'ble Karnataka High Court, emphasizing the entitlement of the appellant to receive the refund. The Tribunal's ruling allowed the appellant's claim for a cash refund and overturned the previous order, ultimately deciding in favor of the appellant.