2017 (2) TMI 974 - AT - Central Excise

Refund claim - availing area based exemption - the respondent has opted to avail exemption under N/N. 50/03-CE dated 10.6.2003 and is not in a position to utilize the cenvat account - whether the respondent is entitled to take refund in cash or not? - Held that - reliance placed in the case of Bombay Burmah Trading Corpn.Ltd. 2008 (3) TMI 12 - Supreme court wherein this Tribunal has held that there is no bar on payment of refund by way of cheque/cash in case the assessee ceases to exist as a manufacturing unit and has no cenvat account into which refund can be credited - the respondent is entitled for refund by way of cash - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Entitlement to refund in cash under Notification No.50/03-CE.

Analysis:
The case involved an appeal by the Revenue against an order regarding the refund claim made by the respondent. The respondents had supplied goods to the Special Relief Commissioner, Govt. of Orissa without payment of duty under an Adhoc Exemption Order. The department found that the credit on a specific quantity of inputs used in the manufacture of exempted goods had not been reversed by the appellant. The appellant voluntarily debited a certain amount from their accounts. The department demanded the remaining amount along with interest and imposed a penalty. The Commissioner (Appeals) set aside the order of adjudication as time-barred, and the respondent filed a refund claim. The adjudicating authority sanctioned the refund claim partially in cash and partially through credit in the cenvat account. The respondent appealed again for the refund to be entirely in cash, which was granted by the Commissioner (Appeals). The Revenue appealed this decision.

The main issue in question was whether the respondent was entitled to a refund in cash. The Tribunal noted that the respondent had opted for exemption under Notification No.50/03-CE and was unable to utilize the cenvat account due to this choice. Citing precedents, the Tribunal highlighted that when an assessee ceases to exist as a manufacturing unit and has no cenvat account, there is no bar on refund being paid in cash or by cheque. The Tribunal found that the respondent, by availing the exemption, was not in a position to utilize the cenvat account, making them eligible for a refund in cash. The Tribunal upheld the decision of the Commissioner (Appeals) to grant the refund in cash, dismissing the appeal filed by the Revenue.