2024 (10) TMI 1398 - HC - Central Excise

Refund of unutilized CESTAT credit - no appeal lies against the order dated 6 November 2023, by which the Appellant s application for rectification came to be rejected - HELD THAT - The learned counsel for the Appellant relied on Lav Kush Textile 2017 (5) TMI 1021 - RAJASTHAN HIGH COURT to contend that relief was granted by the Division Bench of the Rajasthan High Court on identical facts. On considering Lav Kush Textile, it is found that the same has relied upon the decision of the Karnataka High Court in Slovak India 2006 (7) TMI 9 - KARNATAKA HIGH COURT . Further, this decision notes that the Hon ble Supreme Court had confirmed the Karnataka High Court order by dismissing the SLP against the same. In effect, therefore, the view taken in Lav Kush Textile based, according to the learned counsel for the Appellant on facts identical to the present case, directly conflicts with the view taken by the Full Bench of this Court in the case of Gauri Plasticulture 2018 (4) TMI 1233 - BOMBAY HIGH COURT . There are no error in the impugned orders made by the CESTAT, since these orders relied upon the decision of the Full Bench in the case of Gauri Plasticulture. Even considering the slight difference in the factual positions, it is difficult to hold that the ratio in the case of Gauri Plasticulture is not attracted or would not cover the Appellant s case. The impugned orders made by the CESTAT are not error-prone and that no substantial question of law arises in this appeal - Appeal dismissed.

Summary

Issues:
Challenge to CESTAT orders dated 6 November 2023 and 15 December 2022; Interpretation of refund of unutilized CESTAT credit; Conflict between decisions in Gauri Plasticulture and Lav Kush Textiles cases.

Analysis:
The appeal before the High Court challenged CESTAT orders dated 6 November 2023 and 15 December 2022. The Appellant sought a refund of unutilized CESTAT credit, arguing that the duty was paid when the factory was operational, unlike the scenario in Gauri Plasticulture case. The Appellant contended that based on the Full Bench decision in Gauri Plasticulture, the refund should have been granted in cash or credited to other operational units. The Respondent, however, defended the CESTAT order, citing the overruling of previous decisions by the Full Bench in Gauri Plasticulture. The Full Bench had addressed questions regarding cash refund under the Central Excise Act and the refund of unutilized Cenvat Credit due to the closure of manufacturing activities. The Full Bench concluded that the refund of unutilized credit is permissible only in specific circumstances, such as clearance for export without payment of duty. The Appellant relied on Lav Kush Textiles case, which was based on the Slovak India case, conflicting with the Full Bench decision in Gauri Plasticulture.

The High Court analyzed the conflicting decisions and found no error in the CESTAT orders, as they were in line with the Full Bench ruling in Gauri Plasticulture. Despite minor factual differences, the High Court held that the Appellant's case fell within the ambit of the Full Bench decision, dismissing the appeal without costs. The Court emphasized that no substantial question of law arose in the appeal, thereby upholding the CESTAT orders.