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TMI Blog2020 (12) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the refund claim - HELD THAT:- In the case in hand, the claim of interest by the appellant during the course of arguments is a consequential relief, as it has been held that the appellant is entitled for refund, then they are entitled for interest also after three months of filing of the refund claim. It is a fact on record that at the time of filing of refund claim before the adjudicating authority, the appellant was not aware that the adjudicating authority will not sanction their refund claim within three months of the filing of the same. Therefore, claim of interest on delayed refund could not be raised before the adjudicating authority - Admittedly, it has been held that it is a consequential relief, therefore, the appellant is entitled for interest after three months from the date of filing refund claim. The issue of claim of interest is a legal issue and can be raised at this stage, as the appellant has succeed on merits that they are entitled for refund claim, therefore, the adjudicating authority shall entertain the claim of interest of the appellant after three months from the date of filing refund claim - Appeal allowed - decided in favor of appellant. - Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C-P H-CX - C.E.A. No. 15 of 2009 dated 10.02.2009 (P H) (b) M/s Welcure Drugs Pharmaceuticals Ltd vs. CCE, Jaipur 2018 (15) CGST 257 (Raj) (c) CCE, Nasik vs. Jain Vanguard Polybutlene Ltd 2010 (256) ELT 523 (Bom) as upheld by Hon ble Apex Court reported in 2015 (326) ELT A86 (SC) 4. On the other hand, the ld. A.R. opposes the contention of the ld. Counsel. He filed written submissions and requested that the same may be taken on record as part of the order. Therefore, the written submissions filed by the ld. A.R. are taken on record as under: The appellant was engaged in the manufacture of goods falling under Chapter 72 of the CETA, 1985 and availing Cenvat credit under Cenvat Credit Rules, 2004(‗CCR ). They surrendered their Central Excise registration certificate on 26.10.2013. On 17.06.2014, they filed refund claim for the unutilised balance of Cenvat credit which was rejected by the adjudicating authority, after having issued a show cause notice on 12.09.14 seeking to deny the same on the grounds that the same was neither covered under Section 11B of the Central Excise Act, 1944(Act) nor under Rule 5 of Cenvat Credit R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, as both units had surrendered their registration. REBUTTAL: The ratio of Slovak India is not applicable to the subject case in view of the fact that the said case law had been distinguished in Steel Strips v/s CCE, Ludhiana 2011 (269) ELT 257 (Tri-LB) wherein it had been held that refund of unutilized Cenvat credit lying in the books of a company which had shut its operations, was not admissible as there was no express provision for the same. Further, the Larger Bench of Bombay High Court in the case of Gauri Plasticulture Pvt Ltd v/s CCE, Indore - 2019 (30) G.S.T.L. 224 (Bom) while answering the reference arising out of a Division Bench differing with another Division Bench s view of the said High Court taken in the case of CCE v/s Jain Vanguard Polybutylene Ltd. - 2010 (256) E.L.T. 523 (Bom.), held that: cash refund was not permissible in terms of clause (c) to the proviso to section 11B(2) of the Central Excise Act, 1944 where an assessee was unable to utilize credit on inputs. by exercising power under Section 11B of the said Act of 1944, a refund of unutilized amount of Cenvat Credit on account of the closure of manufacturing activities cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of use of the input in the manufacture for domestic clearances , however it then proceeded to decide the matter going beyond the express provisions of the Statute and allowing the benefit to the litigant relying on Slovak India (supra). It is pertinent to note that the Larger Bench in Steel Strips (supra) and Gauri Plasticulture (supra) had distinguished Slovak India. Further, in the case of Modipon Ltd v/s CCE, Ghaziabad - 2017 (49) S.T.R. 205 (Tri. Del) a Division Bench held that there was no provision of cash refund of accumulated credit due to stoppage of production under Section 11B ibid which was applicable only to duty paid on goods either through cash or through Cenvat credit. It also noted that in case of closure of factory, unutilized credit would lapse unless production resumed by assessee or by another, if said factory was sold or hired out. Lastly it was observed that other than Rule 5 of CCR, there was no provision under law for cash refund of accumulated credit which was in turn subject to condition that accumulated Cenvat credit had to be in respect of inputs used in manufacture of export goods or assessee not in position to utilize said accumula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram FO no. 61626/2018 issued by placing reliance on Slovak India which has been rebutted in previous paragraphs Ranjeev Steels Pvt Ltd v/s CCE, Ludhiana FO no. 60452/2019 based on Shree Krishna (supra) New Plea : Entitled to interest on the amount of the refund after 3 months from the date of filing the claim REBUTTAL: The Appellant had not raised this plea either at the post show cause notice adjudication stage, while filing appeal before Commissioner (Appeals) or at the time of filing the subject appeal. It is only while filing the subject written submissions that they have raised this new issue for the first time. Various appellate fora have consistently held that a new issue cannot be raised at appellate stage if it has not been raised at the preliminary litigation stage. Reliance is placed on the following case laws: CCE, Mumbai-V v/s Sandeep Enterprises - 2012 (276) E.L.T. 65 (Tri. - Mumbai) DLF Ltd v/s CC, Kandla - 2014 (302) E.L.T. 303 (Tri. Ahmd) Chennai Port Trust v/s CST, Chennai - 2017 (5) G.S.T.L. 394 (Tri. Chennai) BPCL v/s CC, Pune - 2019 (370) E.L.T. 1422 (Tri. Mumbai) R A Castings Pvt Ltd v/s C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government, by notification: Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under subsection (5) of section 3 of the Customs Tariff Act shall be utilised for payment of service tax on any output service. Explanation : For the purposes of this rule, the words output service which is exported means the output service exported in accordance with the Export of Services Rules, 2005. Rule 5 of Cenvat Credit Rules, 2004 after 01.04.2012 Rule 5 Refund of CENVAT Credit. (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms and Central Excise Duties and Service Tax Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the [Service Tax Rules, 1994] in respect of such tax. Explanation 1- For the purposes of this rule,- (1) export service means a service which is provided as per rule 6A of the Service Tax Rules,1994; (2) relevant period means the period for which the claim Explanation 2 For the purposes of this rule, the value of services, shall be determined in the same manner as the value for the purposes of subrule (3) and (3A) of rule 6 is determined. On going through the Rule 5 of Cenvat Credit Rules, 2004 prior and after 01.04.2012, there is no material change in the rule. In fact, Rule 5 after 01.04.2012 only provides a formula for allowance of refund in case of export of output service, otherwise whole of the Rule 5 deals with the situation refund of cenvat credit lying unutilized in cenvat credit account. 7.3 The ld. A.R. also heavily relied on the decision of the Hon ble Apex Court in the case of Dilip Kumar and Company Other - 2018 (361) ELT 577 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tri.-Mumbai); CCE, Ahmedabad v. Babu Textile Industries, 2003 (158) E.L.T. 215 (Tri.-Mumbai); and CCE, Ahmedabad v. Arcoy Industries, 2004 (170) E.L.T. 507 (Tri.- Mumbai). The Tribunals in all the aforementioned cases have held that the assessee is entitled to refund in cash of the amount deposited if the assessee has gone out of the Modvat Scheme or his unit is closed. The Supreme Court has considered all the aforementioned decisions. Before the Supreme Court it was conceded by the revenue that no appeal had been filed against the orders of the Tribunal. Therefore, the order of the Division Bench of Karnataka High Court was upheld. In view of the above, both the questions of law raised by the learned counsel for the appellant deserves to be answered in favour of the assessee and against the revenue. This Tribunal in the case of M/s Shree Krishna Paper Mills Ind. Ltd. (supra) has observed that although this Tribunal has denied refund claim in the case of Phoenix Inds Ltd (supra) but the Regional Bench at Chandigarh is bound by the decision of Hon ble High Court of Punjab Haryana; therefore, relying on the decision of Rama Industries Ltd (supra), I hold that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of arguments is a consequential relief, as it has been held that the appellant is entitled for refund, then they are entitled for interest also after three months of filing of the refund claim. It is a fact on record that at the time of filing of refund claim before the adjudicating authority, the appellant was not aware that the adjudicating authority will not sanction their refund claim within three months of the filing of the same. Therefore, claim of interest on delayed refund could not be raised before the adjudicating authority. Admittedly, it has been held that it is a consequential relief, therefore, the appellant is entitled for interest after three months from the date of filing refund claim in the light of the decision of the Hon ble Apex Court in the case of M/s Ranbaxy Laboratories Ltd (supra). 12. In view of the above discussions, I hold that the issue of claim of interest is a legal issue and can be raised at this stage, as the appellant has succeed on merits that they are entitled for refund claim, therefore, the adjudicating authority shall entertain the claim of interest of the appellant after three months from the date of filing refund claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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