Manufacturer of Electricity Meters Granted Cash Refund for Unutilized Credit Upon Closure of Operations

The Tribunal allowed the appeal of a manufacturer of electricity meters for a cash refund of unutilized credit upon closure of operations under Rule 5 of Cenvat Credit Rules, 2004. The Tribunal relied on precedents such as Shri Guru Hargobind Steel Industries and JU Pesticides where cash refunds were granted in similar cases. Citing the case of Kirlosker Toyota Textile Machinery, the Tribunal held that the appellant was entitled to the cash refund. The impugned order was set aside, and the appeal was allowed with any consequential relief. Judgment was pronounced on 04.02.2022.

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Issues:
Refund claim of credit remained unutilized on closure of operation.

Analysis:
The appellant, a manufacturer of electricity meters, filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004 for unutilized credit on closure of operation. The claim was rejected by authorities. The appellant argued citing precedents like Rama Industries Ltd. and various case laws supporting their claim for cash refund. The respondent contended that no cash refund is permissible without statutory provisions, referring to Rule 5 amendment in 2012. The Tribunal examined precedents like Shri Guru Hargobind Steel Industries and M/s.Shree Krishna Paper Mills Ltd., where cash refund was allowed in similar cases. Notably, in the case of JU Pesticides vs. CCE, cash refund was granted by the Tribunal. The Tribunal also considered the ruling of Nichiplast India Pvt.Ltd. vs. Principal Commissioner of CGST & Central Excise, Delhi, supporting cash refund.

The Tribunal referred to the case of Kirlosker Toyota Textile Machinery, where cash refund was allowed for unutilized credit on closure of operation. Based on these judicial pronouncements, the Tribunal held that the appellant is entitled to cash refund under Rule 5 of Cenvat Credit Rules, 2004. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The judgment was pronounced on 04.02.2022.

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