Cenvat credit refund on permanent factory closure upheld where closure and surrender procedures were duly complied with.

Unutilised Cenvat credit remaining at the time of permanent factory closure is refundable in cash where the assessee follows the prescribed intimation and registration surrender procedure. The CESTAT applied its earlier view under the Capacity Determination Rules, 2010 and the Cenvat framework that refund cannot be denied merely because duty was paid under the compound levy scheme, absent a valid statutory bar. On that basis, the assessee's refund claim was accepted and consequential relief followed.

---

---

Issues: Whether the assessee was entitled to cash refund of unutilised Cenvat credit lying in balance at the time of closure of the factory and surrender of registration.

Analysis: The appeals concerned refund claims arising after the assessee permanently ceased manufacturing and surrendered registration. The relevant scheme under the Capacity Determination Rules, 2010, read with the Cenvat framework, was examined in the assessee's own earlier case and followed here. The governing principle applied was that when the factory permanently closes and the prescribed intimation and surrender procedure is followed, unutilised Cenvat credit cannot be denied refund merely because the levy is paid under the compound levy scheme. The earlier view that such credit is refundable on closure was treated as covering the present controversy.

Conclusion: The assessee was held entitled to cash refund of the unutilised Cenvat credit.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Unutilised Cenvat credit remaining at the time of permanent closure of the factory is refundable where the assessee has complied with the prescribed closure and surrender procedure, and such refund cannot be denied in the absence of a valid statutory bar.

---