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TMI Blog2016 (12) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... - APPEAL No.E/1122/08 - ORDER No.A/87962/16/SMB - Dated:- 15-6-2016 - Mr. Raju, Member (Technical) Shri. Ashutosh Nath, Asst. Comm. (AR) for appellant Shri. Karl Shroff, Advocate, for respondent Per: Raju 1. The respondent, M/s.Hindoostan Spinning Weaving Mills Ltd., opted to avail full exemption by filing Notification No.30/2004-CE dated 09/07/2004 with effect from 16/03/2005. At the time of opting out, the appellant had credit of AED (TTA) of ₹ 14,73,718/- to their credit. The respondent filed a refund claim under Rule 5 relying on the decision of Hon ble High Court of Karnataka in the case of Slovak India Trading Co. Pvt. Ltd. - 2006 (201) ELT 559 (Kar). The said refund claim was rejected by the original adjudicating authority. However, the same was allowed by the first appellate authority. Aggrieved by the said order, the Revenue is in appeal before the Tribunal. 2. The learned AR argued that Rule 5 of the Cenvat Credit Rules, 2004 permits refund of Cenvat Credit only in certain conditions. Inability to utilise the credit due to export of finished goods is only reason on which the credit can be allowed. He pointed out that the conditions nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund has been sanctioned to them in the year 2009 and no demand has been issued for recovery of the same, the said order cannot be challenged no more. The respondent also relied on the decision of the Tribunal in the case of CCE Ahmedabad Vs. Arcoy Industries - 2004 (170) ELT 507 (Tri-Mum), CCE Ahmedabad Vs. Babu Textile Industries - 2003 (158) ELT 215 (Tri-Mumbai) and Morarjee Goculdas Spg. Wvg. Co. Ltd., Vs. CCE, Mumbai (Order No.A/489 490/07/C-I dated 10/07/2007 and Shree Prakash Textiles (Guj) Vs. CCE Ahmedabad - 2004 (169) ELT 162 (Tri-Mumbai) and Bombay Dyeing Mfg. Co. Ltd. - 2007 (80) RLT 545 (CESTAT-Mum) . 4. I have gone through the rival submissions. I find that the Hon ble High Court of Karnataka in the case of Slovak India Trading Co. Pvt. Ltd. (supra) has observed that Rule 5 of the Cenvat Credit Rules, 2002 does not expressly prescribed refund of unutilized credit where there was no manufacture in the light of closure of factory. It is noticed that the facts in the said case were as follows: 2. Respondent-company is engaged in manufacture of shoes for M/s. Bata India Ltd. They are registered under the Central Excise Registration. The respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances on equitable ground it was held that refund of such credit could be granted in cash under Rule 5 of the Cenvat Credit Rules. I find that in the case of Arcoy Industries and Babu Textile Industries (supra) also the facts were similar. In both the cases the refund claim of earlier period was sanctioned after the unit had either closed down or gone out of Cenvat scheme. It is seen that there are two distinct stages first the refund of credit has to be admissible and second the recipient had meanwhile lost ability to used the credit (either by way of closure or exemption or otherwise). These were the conditions noticed in facts which were considered while allowing refund of Cenvat Credit in cash . The decision in the case of Bombay Dyeing Mfg. Co. Ltd. (supra) were issued relying on the decision of the Hon ble High Court of Karnataka in the case of Slovak India Trading Co. Pvt. Ltd. (supra) . The decision in the case of Shree Prakash Textiles Ltd. (supra) and interim order remanding the case. I find that the Larger Bench of Tribunal in the case of Steel Strips (supra). After examining the decision of Hon ble High Court of Karnataka in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been said that if taxing provision is so wanting in clarity that no meaning is reasonably clear, the court will be unable to regard it as of any effect. [Ref : IRC v. Ross and Coulter, (1948) 1 All ER616, p.625 (HL); referred to in Gursahai v. CIT, AIR 1963 SC 1062, p. 1064 : (1963) 3 SCR 893.]. It has also been held that in interpreting taxing statute, equitable considerations are entirely out of place nor can taxing statutes be interpreted on any presumptions or assumptions. It must interpret a taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assumed deficiency. [Ref : Sales Tax Commissioner v. Modi Sugar Mills, AIR 1961 SC 1047, p. 105, CIT v. M. G. Mills - AIR 1971 SC 2434, p. 2435]. Construction Preserving Workability and Efficacy should be preferred 5.4 In construing provisions designed to prevent tax evasion, if the Legislature uses words of comprehensive import, the courts cannot proceed on an assumption that the words were used in a restricted sense so as to defeat the avowed object of the Legislature - Ref : C.A. Abraham v. ITO, K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of the appeal but of the special leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither doctrine of merger nor Article 141 of the Constitution is attracted to such an order. Grounds entitling exercise of review Jurisdiction conferred by Order 47 Rule 1 of the C.P.C. or any other statutory provision or allowing review of an order passed in exercise of writ or supervisory Jurisdiction of the High Court (where also the principles underlying or emerging from Order 47 Rule 1 of the C.P.C. act as guidelines) are not necessarily the same on which this court exercises discretion to grant or not to grant special leave to appeal while disposing of a petition for the purpose. Mere rejection of special leave petition does not take away the Jurisdiction of the court, tribunal or forum whose order forms the subject matter of petition for special leave to review its won order if grounds for exercise of review Jurisdiction are shown to exist. Where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality. (See Corpus Juris Secundum, Vol. LVII, pp. 1067-1068). 43. We may look at the issue from another angle. The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme Court can be reversed or modified only after granting leave to appeal and then assuming appellate Jurisdiction over it. If the order impugned before the Supreme Court be reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage. 44. To sum up our conclusion are : (i) Where an appeal or revision is provided against an order passed by a court. Tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y order binding as res Judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and appellate Jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation. (vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an appeal before Supreme Court the jurisdiction of High Court to entertain a review petition is lost thereafter as provided by sub-rule (1) of Rule (1) of Order 47 of the C. P. C. [Emphasis supplied]. 5.6 No doubt there are cases where Hon ble Supreme Court while dismissing Revenue s Civil Appeal did not go into merits of the issues but had dismissed the appeal only on the ground that there was no appeal by Revenue previously on similar cases. But it has been held by Apex Court in the case of CCE, Raipur v. Hira Cement, reported in 2006 (194) E.L.T. 257 (S.C.) = 2007 (8) S.T.R. 96 (S.C.) that non-filing of an appeal against an order in any event would not be a ground for refusing to consider the matter on its own merit. Merely because in some c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial compliance means actual compliance in respect to the substance essential to every reasonable objective of the statute and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Refunds and Exemption are Governed by Rule of Strict Compliance 5.8 Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. He has only the right of prosecution or defence in the manner laid down by law. He has no right than to proceed according to the mandate of the statute governing the subject. Claim of refund is not a matter of right unless vested by law. That would depend upon the object of the statute and eligibility. The purpose for which law has been made and its nature, the intention of the legislature in making the provision, the relation of the particular provision to other provisions dealing with the subject including the language of the provision are considerable factors in arriving at the conclusion whether a particular claim is in accordance with law. No injustice or hardship can be raised as plea to claim refund in absence of statutory mandate in that behalf and no equity or good conscience influence fiscal courts without the same being embedded to the statutory provisions. 5.12 The question before the Larger Bench in Gauri Plasticulture (P) Ltd. - 2006 (202) E.L.T. 199 (Tri.-LB.) was whether duty debited in RG23A part II can be refunded in cash when the refund becomes otherwise due. The Larger Bench without recording the submissions of either side merely discussed outcome of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for that reason, he had to pay duty in cash or out of the PLA, they would be entitled to refund of that credit in cash, on the dispute being ultimately settled in their favour. In the decisions holding that such refund in cash is not possible, it has been observed that there is no provision allowing refund of such credit in cash. However, we are not in agreement with the above proposition for the simple reason that there is also express no bar in the Modvat Rules to that extent We have to keep in mind that it is not the refund of unutilized credit, but the credit which has been used for payment of duty at the insistence of the revenue or has been reversed because the Department was of the view that the same is not available for utilization. This is a simple and basic principle of equity, justice and good conscience. Had the Department not prevented the assessee from utilizing the credit otherwise available to him, they would have been in a position to use the same towards payment of duty on their final product, which obligation they had to discharge from their PLA account. As such, on the success of their claim subsequently, if the assessee is maintaining Modvat credit and is in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich needs sanction of law and an order of refund for such purpose is sine qua non. Law has only recognized the event of export of goods for refund of Modvat credit as has been rightly pleaded by Revenue and present reference is neither the case of otherwise due of the refund nor the case of exported goods. Similarly absence of express grant in statute does not imply ipso facto entitlement to refund. So also absence of express grant is an implied bar for refund. When right to refund does not accrue under law, claim thereof is inconceivable. Therefore, present reference is to be answered negatively and in favour of Revenue since refund of unutilized credit is only permissible in case of export of goods and for no other reason whatsoever that may be. As has been stated earlier that equity, justice and good conscience are the guiding factors for Civil Courts, no fiscal Courts are governed by these concepts, the present reference is bound to be answered in favour of Revenue and it is answered accordingly. 5. Thus in terms of the decision of larger bench, which has been given after examining the Decision of Hon ble High court in case of Slovak (supra), the respondents are not entit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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