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TMI Blog2018 (8) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... n closure of the factory?" 3.0 The facts of the case are that Appellant was manufacturing medicine, namely, Odoxin, which was governed by direct price control order. 3.1 A duty of 4% was paid on Odoxin whereas input credit utilized in manufacture of Odoxin suffered a duty of 10 percent on local inputs and 14% on imported inputs. As a result, there was wide gap between CENVAT credit availed and duty paid on the final product. 3.2 The appellant was unable to utilize the CENVAT credit by paying the duty on final product resulting into a credit balance of Rs. 1,34,45,987/- lying in CENVAT credit. 3.3 The appellant closed their factory on 31.03.2011 and applied for cash refund of the CENVAT amount of Rs. 1,34,45,987/- lying in their CENVAT credit account. 3.4 The appellant's application for cash refund has been rejected by the Asst. Commissioner and Commissioner (Appeals). 4. In view of closure of the industry, the amount which was entitled for, counsel for appellant contended that the Tribunal has committed an error in rejecting the claim of the appellant. 5. Learned counsel for appellant placed reliance on Union of India vs. Slovak India Trading Co. Pvt. Ltd., 2006 TIOL 46 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty." 5. There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case on hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly ruled by the Tribunal. The Tribunal has noticed various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these circumstances, no useful purpose would have been served in crediting the amount in the CENVAT account." 4. M/s Rama Industries Ltd. vs. Commissioner of Central Excise, Chandigarh, 2009 TIOL 100- HC-P&H-CX, wherein it has been observed: "a) Whether refund in cash of Cenvat credit can be allowed in case of closure of the manufacturing unit? b) Whether impugned order of the Tribunal is justified in view of judgment of Karnataka High Court in the case of Union of India v. Slovak India Trading Co. Pvt. Ltd., 2006 (2001) E.L.T. 559 (Kar.)?" We have heard learned counsel for the parties and have perused the paper book with their able assistance. The matter is covered against the revenue by the Division Bench judgment of Karnataka High Court in the case of Union of India v. Slovak India Trading Co. Pvt. Ltd., 2006 (2001) E.L.T. 559 (Kar.), wherei n it has been held that Rule 5 of Cenvat Credit Rules, 2002 (for brevity, 'the Rules') in terms does not prohibit refund in cash of Cenvat credit. On a further appeal against the aforesaid judgment of the Division Bench to the Supreme Court, Special Leave Petition has been dismissed by holding that the revenue did not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. It should also be noted that there is no co-relation of the raw material and the final product; that is to say, it is not as if credit can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available." 8. Counsel for the respondents Mr. Ranka appearing for the Department has relied upon the following decisions of the Supreme Court. 1. Kunhayammed and Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dilip Pralhad Namade, (2004) 3 SCC 619, wherein it has observed: "13. Coming to the plea regarding long passage of time it is to be noted that the two orders passed by this Court in SLP (Crl.) Nos. 1136/2002 and 434/2003 referred to above do not lay down any principle of law of invariable nature to be universally applied. Furthermore, disposal of SLP against a judgment of the High Court does not mean that the said judgment is affirmed by such dismissal. The order passed in any SLP at threshold without detailed reasons does not constitute any declaration of law or constitute a binding precedent. (see Union of India and Ors. v. Jaipal Singh (2004)ILLJ431SC . This court cannot and does not reverse or modify the decree or order appealed against while deciding the petition for special leave to appeal and that too when the SLP was being dismissed. What is impugned before this Court can be reversed or modified only after granting leave and then assuming appellate jurisdiction over it. If the order impugned before this Court cannot be reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage (see Kunhayammed and Ors. v. State of Kerala and Anr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse the observations of the High Court that, despite inordinate delay, the appellate authority, if moved under Section 30(2), will give due regard to the happenings in between, in exercising its power of condonation of delay in filing, appeals. We also make it clear that no observation made in this judgment with regard to delay on the part of the assessee in moving the High Court under Article 226 shall be taken into account to the prejudice of the assessee while considering the condonation of the delay on the part in preferring the appeal/appeals, if any, filed by him to the appropriate authority under the Act." 4. Late Nawab Sir Mir Osman Ali Khan vs. Commissioner of Wealth Tax, Hydrabad, 1986 Supp SCC 700, wherein it has been observed: "It is, however, well settled that dismissal of special leave petition in limin e does not clothe the decision under appeal in special leave petition with the authority of the decision of this Court. See in this connection the observations in Daryao v. State of U.P. [AIR 1961 SC 1457]. It may be mentioned as was rightly observed by a Full Bench of the Allahabad High Court in Sahu Govind Prasad v. CIT [(1983) 144 ITR 851, 863 (All)] special l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty." 11. In our considered opinion, in view of the observations made by the Karnataka High Court in Slovak India Trading Co.'s case (supra) and also in Collector of Central Excise, Pune's case (supra) by the Supreme Court, which reads as under: 17. It is clear from these Rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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