2005 (8) TMI 273 - AT - Central Excise

Summary

Issues involved: Challenge to rejection of refund claim u/s Rule 5 of Cenvat Rules for unutilized credit upon factory closure.

Summary:
The appellant contested the Commissioner's order rejecting a refund claim of Rs. 4,15,057/- related to unutilized Cenvat credit upon factory closure. The Commissioner held that Rule 5 of the Cenvat Rules does not allow cash refunds. The appellant argued that the rejection grounds were not communicated in the show cause notice, citing precedents where refunds were granted in cash upon exiting the Modvat scheme or factory closure. The DR opposed, stating a legal provision is necessary for such refunds. After considering both arguments, the Tribunal noted consistent rulings that cash refunds are permissible when leaving the Modvat scheme or closing the unit. Consequently, the impugned order was overturned, and the appeal was allowed with any necessary relief.

(Pronounced and dictated in the court)