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TMI Blog2018 (4) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... NVAT credit in the event of impossibility of utilisation. CENVAT Credit Rules, 2004 is not an exemption scheme but a contrivance to ensure that the incidence of duty or tax is borne by the ultimate purchaser of goods or service in a chain. It is seen that the appellant is not before the Tribunal with a valid claim of the tax/ liability having been collected from its supplier without authority of law. Neither the Central Excise Act, 1944 nor the CENVAT Credit Rules, 2004 envisages a refund of credit in the absence of such a ground. Refund not allowed - appeal dismissed - decided against appellant. - E/87626/15 - A/92208/2017 - Dated:- 13-10-2017 - Mr CJ Mathew, Member (Technical) Ms Deepti Venugopal, Asst. Legal Manager, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trips and in Phoenix Industries Pvt Ltd v. Commissioner of Central Excise, Raigad [2015 (330) ELT 303 (Tri.-mum)] as well as that in Bir/a Corporation Ltd v. Commissioner of Central Excise, Pune I [2011 (274) EL T 529 (Tri. Mum)], 4. The decision of the Hon'ble High Court of Karnataka in re Slovak India Trading Co Ltd was rendered in the context of claim for refund of CENVAT Credit that was not utilisable by the applicant therein as they were not producing any goods during the period and did not have any finished goods in stock for which the credit could be utilised at the time of clearance. The lower authorities had held that the applicant was not eligible for refund under the provisions of rule 5 of CENVAT Credit Rules, 2002 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure for adjustment of duty liability against Modvat Account. That is required to be carried out in accordance with law and unadjusted amount is not expressly permitted to be refunded. In absence of express provision to grant refund, that is difficult to entertain except in the case of export. There cannot be presumption that in the absence of debarment to make refund in other cases that is permissible. Refund results in outflow from treasury, which 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 expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT credit, the accumulated pool of taxes and duties collected on supply of input services and inputs from an assessee, was in vogue till recently as the successor scheme of MODVAT credit for discharge of duty liability on outputs. The erstwhile Central Excise Rules, 2002 by rule 8(2) deemed goods to have been cleared under authority of law if discharged by payment or by utilisation of credit; this flows from the authority to levy and collect duty of excise in section 3 of Central Excise Act, 1944. 8. Thus the scheme, with the avowed objective of preventing the cascading effects of tax, allows discharge of tax liability from two sources: the cash deposit known as 'account current' and from the credit of the tax already collecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incidence of duty or tax is borne by the ultimate purchaser of goods or service in a chain. 10. If it were an exemption scheme, entitling assessees to refund of unused accumulated credit, the CENVAT Credit Rules, 2004 would have had the authority of section 5A of Central Excise Act, 1944 and section 93 of Finance Act, 1994. The Rules are issued under section 37 of Central Excise Act, 1944 and section 94 of Finance Act, 1994 to operationalize section 3 of the former and section 66 of the latter. 11. Moreover, the conversion of credit into cash would be a refund to the buyer of the tax collected under authority of law from a manufacturer-seller. Refund in tax statute is the return of a tax collected without authority of law and, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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