2017 (12) TMI 1160 - AT - Central Excise

Refund of unutilized CENVAT credit - rejection on the ground that the refund of credit is admissible only in case where the goods has been exported and that such refund claim has to be filed alongwith proof of due exportation and relevant extract of the records maintained under the said rule or deemed credit register maintained in respect of the textile fabrics - Held that - reliance placed in the case of COMMISSIONER OF C. EX., NASIK Versus JAIN VANGUARD POLYBUTLENE LTD. 2010 (6) TMI 171 - BOMBAY HIGH COURT , where it was held that High Court in present case cannot take different view from the Union of India v. Slovak India Trading Co. Pvt. Ltd. 2006 -TMI - 606 - HIGH COURT OF KARNATAKA (BANGALORE) , as approved by the Supreme Court, where The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. Appellants are eligible to the refund claim filed by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of refund claim under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
1. The appellant, engaged in manufacturing textile articles and exporting finished goods, accumulated credit in their cenvat credit account due to inability to utilize it. They filed a refund claim under Rule 5 of Cenvat Credit Rules, 2002, which was rejected by the authorities. The rejection was based on the requirement of proof of exportation for refund claims. The appellant appealed the decision.

2. The senior counsel for the appellant argued that the rejection was incorrect as the accumulated credit was related to inputs and input services used in exporting goods. He cited judgments by the Hon'ble High Court of Karnataka and the Hon'ble Bombay High Court to support the claim that refund is admissible when the credit cannot be utilized. The counsel contended that the larger bench judgment relied upon by the authorities was not applicable in this case.

3. The revenue authorities, represented by the Assistant Commissioner, reiterated the findings of the impugned order, supporting the rejection of the refund claim.

4. The tribunal analyzed the arguments and cited the judgment of the Hon'ble High Court of Karnataka, which was not discussed in the larger bench judgment relied upon by the revenue authorities. Additionally, the tribunal referred to a judgment by the Hon'ble High Court of Bombay, which supported the appellant's position. The tribunal concluded that the appellant was eligible for the refund claim based on the judgments of the Hon'ble Karnataka High Court and the jurisdictional Hon'ble High Court of Mumbai. The appeal was allowed, granting consequential relief to the appellant.

5. The tribunal dismissed the appeal based on the above analysis and the applicability of the judgments cited, emphasizing the importance of following established legal principles and precedents in deciding similar cases.