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TMI Blog2019 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... scharge of duty liability by their suppliers. The issue decided in the case of VOLTAS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE IV [ 2018 (4) TMI 352 - CESTAT MUMBAI ] where it was held that It is clear that legislative intent did not envisage the monetisation of CENVAT 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. Appeal dismissed. - EXCISE APPEAL NO: 1414 of 2010, 1415 of 2010 - A/86495-86496/2019 - Dated:- 29-8-2019 - HON BLE MR C J MATHEW, MEMBER (TECHNICAL) AND HON BLE DR SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri None for the appellant Shri Anil Choudhary, Deputy Commissioner (AR) and Shri NN Prabhudesai, Superintendent (AR) for the respondent ORDER PER: C J MATHEW In this dispute of M/s Idol Textile Ltd and M/s Balaji Prints Ltd, the issue for determination is the legality and propriety of the rejection of claim for refund of ₹ 24,72,465 and ₹ 12,40,173/- respectively b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taka in re Slovak India Trading Co Pvt Ltd, cited by appellants, was considered by a Larger Bench of the Hon ble High Court of Bombay in Gauri Plasticulture (P) Ltd v. Commissioner of Central Excise, Indore et al [2019-TIOL-1248-HC-MUM-CX-LB], arising from a reference owing to disagreement with an earlier decision of the Hon ble High Court in Commissioner of Central Excise v. Jain Vanguard Polybutylene Ltd [2010-TIOL-911-HC-MUM-CX], and it was held that 30. Prior to such substitution, we have not seen anything in Rule 5 permitting refund of un-utilised credit. We are not dealing with a situation or case of a manufacturer or producer of final products seeks to claim Cenvat Credit of the duty paid on inputs lying in stock or in process when the manufactured or produced goods cease to be exempted goods or any goods become excisable (see Rule 3(2) of the Cenvat Credit Rules, 2004). Thus, refund of Cenvat Credit is permissible where any input is used for the final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export. In the scheme of the rules, therefore, what is sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nswer all the three questions as framed in para 17 against the Revenue and in favour of the assessee. 32. Thus, the High Court of Karnataka took the view that there is no express prohibition in terms of Rule 5 and that rule refers to a manufacturer. Thus, even if there is no manufacture in the light of the closure of the factory, the assessee being a manufacturer is construed as one coming out of the Modvat scheme but still eligible for cash refund. The factory is closed and the inputs were not used in the manufacture of a final product is, thus, overlooked. So long as the assessee is a manufacturer even if his factory is closed, the input credit was available, is thus the view. Hence, the refund was held to be permissible. 33. When the matter was carried to the Hon ble Supreme Court by the Revenue, the Hon ble Supreme Court noted the concession of the learned Additional Solicitor General. That concession is that the views of the tribunals to the aforesaid effect have not been appealed against by the Revenue/Union of India. Pertinently, there is no concession by the Additional Solicitor General of India on the point of law. Hence, going by this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so also when there was a larger Bench view of the tribunal having a binding effect, that the principle of judicial discipline was pressed into service. 36. After the view taken in Steel Strips Ltd. (supra) and which was also fairly brought to our notice, itis evident that this principle has no application to the facts and circumstances before us. The non-applicability of the decision of the Hon ble High Court of Karnataka to the present dispute in the light of the decision of the Hon ble High Court of Bombay would render this dispute to be identical to that in re Voltas Ltd in which the legal and schematic aspects have been examined by the Tribunal to decide that 6. It would appear from these decisions that neither assures a precedent to be followed without examining the circumstances of eligibility. Indeed, the Hon ble High Court of Karnataka did, in re Slovak India Trading Co Ltd, emphasise the importance of scrutinising the circumstances of each claim for refund and directed that a disposal solely on that one statutory exclusion would not suffice. Following that prescription, it is necessary to examine the circumstances in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption 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. 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, not validly retainable with the exchequer. Refund of such accumulated credit arising from payment of duty or tax at the stage of manufacture is tantamount to a finding that the duty or tax was collected at the preceding stage without the authority of law. That is certainly not, and can never be, the contention of the appellant. 8. In view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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