2022 (11) TMI 96 - AT - Central Excise

Refund of Cenvat Credit lying unutilized in the books of account - refund sought on the ground that the factory of the appellant was closed down and there was no occasion or scope to utilize such accumulated Cenvat Credit for payments of Central Excise duty on the excisable goods manufactured by them - HELD THAT - Against the outstanding demand of Rs.51,86,838/- confirmed as interest liability, the refund amount sanctioned by the Department was appropriated against such liability. On perusal of the case records and documents submitted by the appellants today at the time of hearing of appeal, it is found that the interest demands has already been settled under the SVLDRS-4, 2019 and consequent upon settlement of dispute, the appeal filed by the appellant before the Tribunal was also dismissed as deemed withdrawal. On perusal of SVLDRS-4 submitted by the appellant, wherein the department has confirmed that the outstanding liability has already been settled under such scheme. Since there is no liability of making any payments towards the adjudged Government dues as on date, there is no question of any appropriation of the sanctioned refund amount against any liability as mentioned in the adjudication order dated 03.11.2017. The appeal filed by the appellant is allowed, with the direction that the appellant should be entitled for grant of refund for an amount of Rs.35,23,640/-.

Summary

Issues:
- Appropriation of refund against outstanding government dues
- Settlement of interest liability under Sabka Vishwas Scheme
- Entitlement for refund amount sanctioned by the Department

Appropriation of Refund Against Outstanding Government Dues:
The case involved the appellant, engaged in the manufacture of excisable goods, filing a refund application claiming unutilized Cenvat Credit due to the closure of their factory. The Department sanctioned a refund of Rs.35,23,640/- but appropriated it against outstanding government dues of Rs.51,86,838/-. The appellant appealed, arguing that the interest liability had been settled under the Sabka Vishwas Scheme, and there was no outstanding liability against them. The Tribunal found that the interest demands had indeed been settled under SVLDRS-4, and as there was no current liability, there was no basis for the appropriation of the refund amount against any outstanding dues.

Settlement of Interest Liability Under Sabka Vishwas Scheme:
The appellant contended that the interest amount confirmed earlier had been settled under the Sabka Vishwas Scheme, as evidenced by the SVLDRS-4 issued by the Department. The Tribunal acknowledged the settlement under the scheme and noted that the appeal filed by the appellant had been dismissed as deemed withdrawal following the settlement. This settlement under the scheme was crucial in determining the absence of any outstanding liability against the appellant, leading to the decision to allow the refund claim.

Entitlement for Refund Amount Sanctioned by the Department:
After considering the arguments from both sides and examining the case records, the Tribunal concluded that the appellant was entitled to the refund amount of Rs.35,23,640/- sanctioned by the Department. The Tribunal allowed the appeal, setting aside the impugned order and directing the grant of the refund to the appellant. This decision was based on the settlement of the interest liability under the Sabka Vishwas Scheme, which eliminated any outstanding liability against the appellant, justifying the refund entitlement.

In summary, the Tribunal allowed the appeal, ruling in favor of the appellant, as there was no current outstanding liability following the settlement under the Sabka Vishwas Scheme, thereby entitling the appellant to the sanctioned refund amount.