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TMI Blog2025 (3) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the appellant proposing to reject the refund by stating that since there was no export clearance made by the appellant, the refund would not be eligible under Rule 5 of the CENVAT Credit Rules, 2004 (CCR). After due process of law, the Ld. Adjudicating Authority rejected the refund claim. In appeal, the Ld. Commissioner (Appeals) upheld the adjudication order. Hence this appeal. 3. Shri S. Venkatachalam, Ld. Advocate appeared for the appellant and Shri Sanjay Kakkar, Ld. Authorized Representative appeared for the respondent. 3.1 The Ld. Counsel submitted that; a) Cash refund covers both PLA and CENVAT Credit balance and there is no prohibition for cash refund of CENVAT credit which is also duty as defined in the definition itself. b) To hold that the benefit of refund of unutilized CENVAT credit is not available for the units engaged in the manufacture and clearance of goods for home consumption is contrary to Rule 5 of CCR and the interpretation given in the show cause notice itself. c) Section 11B of the Central Excise Act 1944 (CEA), itself covers the refund and hence there is no necessity to invoke Rule 5 of d) The refund claim is filed in time and the appellants hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . vs CC.EX., - 2017 (347) E.L.T. 100 (Tri. -Bang.) xix. USV PVT. LTD. vs CCE & ST-(2023) 5 Centax 7 (Tri.-Ahmd) 3.2 The Ld. AR stated on behalf of revenue took us through the impugned order. He stated that perusal of rule 5 of the CCR read with Notification No 05/2006-CE(N.T.), dated 14/03/2006 which provides the procedure for the claim, indicates that refund of CENVAT credit in terms of the said rule is permissible only when there is a clearance of a final product of a manufacturer or of an intermediate product for export without payment of duty under a bond or letter of undertaking. Rule 5 has been substituted with effect from 1st April 2012. Prior to such substitution there was nothing in Rule 5 permitting refund of un-utilised credit. He referred to the judgment of the Hon'ble Bombay High Court in M/S. GAURI PLASTICULTURE P. LTD. Vs THE COMMISSIONER OF CENTRAL EXCISE, INDORE [2019 (30) G. S. T. L. 224 (Bom.)] and Tecumseh Products India (P. ) Ltd. Vs Commissioner of Central Tax, Hyderabad [2023 (4) TMI 6 - CESTAT HYDERABAD]. He prayed that the appeal may be rejected. 4. I have gone through the appeal memorandum and connected papers and have heard the rival parties. The issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is held to be an entitlement, this entitlement is subject to the restrictions as provided under the Scheme or the Statute. The claim to Input Tax Credit is not an absolute right, but it can be said that it is an entitlement subject to the conditions and restrictions as envisaged in Sections 16(2) to 16(4), Section 43, and Rules made thereunder. 72. In the case of Godrej & Boyce Manufacturing Company Pvt. Ltd & others v. Commissioner of Sales Tax & others [(1992) 3 SCC 624], the Supreme Court, while dealing with Rules 41 and 41A of the Bombay Sales Tax Rules 1959, held that the rule-making authority would be empowered to provide for abridgement or curtailment while extending a concession. (emphasis added) I hence find that an eligibility criterion to get refund calls for a strict construction. 6. I find that the issue raised in this appeal and those cited in the judgments relied upon by the appellant, was examined by a 3 Judge Bench of the Hon'ble Bombay High Court in M/S. GAURI PLASTICULTURE P. LTD. Vs THE COMMISSIONER OF CENTRAL EXCISE, INDORE [2019 (30) G. S. T. L. 224 (Bom.)], had examined the following questions:- "(a) Whether cash refund is permissible in terms of clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying forward of the un-utilised Cenvat Credit. That is a distinct contingency altogether. That transitional provision does not enable us to hold that the amount of un-utilised Cenvat Credit can be refunded in cash. 29. We do not think that by taking assistance of this provision, we will be able to hold as contended by Mr.Patil that the Cenvat Credit can be refunded even in relation to those inputs which have not been used in the manufacture of the final product or the exported goods. We are called upon to read something in the substantive rule and which is totally absent therein. When Rule 5 follows Rule 4, which is titled as "Conditions for Allowing Cenvat Credit", then, we must understand the scheme in such manner as would make the law workable and consistent. Refund of Cenvat Credit in terms of Rule 5 is permissible only when there is a clearance of a final product of a manufacturer or of an intermediate product for export without payment of duty under a bond or letter of undertaking of a service provider, who provides an output service which is exported without payment of tax and by applying the format which is carved out with effect from 1st April, 2012 by the substituted R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In para 5, the reasoning of the High Court of Karnataka reads thus:- "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 rules by the Tribunal. The Tribunal has noticed that 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 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT has lost its persuasive value, particularly when the Special Leave Petitions against the view taken by four different High Courts were either not filed or filed but not entertained. Thus, the tribunals have taken a consistent view and the Revenue could not succeed in having that set aside. It is in these circumstances, the Rajasthan High Court negatived the contention of the Revenue that the tribunal under the jurisdiction of that High Court could have distinguished the orders and judgments of its Benches. That was found to be contrary to the judicial discipline. It is in these circumstances 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, it is evident that this principle has no application to the facts and circumstances before us. 37. Finally, we do not find any merit in the arguments of Mr.Patil to the effect that if the earlier judgment is not appealed against, an appeal against the subsequent order or judgment passed relying upon the earlier judgment cannot be sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e answer the questions of law framed above as (a) and (b) in the negative. They have to be answered against the assessee and in favour of the Revenue. Questions (a) and (b) having been answered accordingly, needless to state that the order of the Hon'ble Supreme Court in the case of Slovak India (supra) cannot be read as a declaration of law under Article 141 of the Constitution of India. (emphasis added) 7. The judgment of the Hon'ble Bombay High court in GAURI PLASTICULTURE (supra), discusses the legal issues and the judgments cited by the appellant, comprehensively. It thus merits to be followed. Thus, it is concluded that rule 5 of CCR read with Notification No 05/2006-CE(N.T.), as it then stood, i.e. prior to 01.04.2011, does not permit the refund of credit which is not on account of the export of goods. Section 11B(2)(c) of CEA is to be read with the rules or notification issued under the Act, and would hence necessarily involve Rule 5 of CCR and Notification No 05/2006-CE(N.T.). The refund claim of the appellant has thus been correctly rejected in the impugned order. 8. It must be stated that the appellant has cited a large number of judgments. Citing multiple decisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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