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of <h1>Tribunal Upholds Partial Refund, Highlights Modvat Rules' Limitations on Cash Refunds, Except for Exports.</h1> <h3>PURVI FABRICS & TEXTURISE (P) LTD. Versus COMMISSIONER OF C. EX., JAIPUR-II</h3> PURVI FABRICS & TEXTURISE (P) LTD. Versus COMMISSIONER OF C. EX., JAIPUR-II - 2004 (172) E.L.T. 321 (Tri. - Del.) Issues involved: The issue involved in this appeal is whether M/s. Purvi Fabrics & Texturise (P) Ltd. is eligible to receive a refund of Modvat credit in cash.Comprehensive Details:Issue 1: Refund of Modvat Credit in CashThe Appellants, textile processors, filed a refund claim for excess duty paid, which was partially sanctioned by the Asstt. Commissioner. The Commissioner (Appeals) further allowed a refund in cash and credit for different amounts. The Appellants argued that once duty is paid using credit, it should be refunded entirely, regardless of the mode of payment. They cited legal precedents supporting cash refunds in such cases. They also highlighted their inability to utilize the credit due to factory closure. Interest under Section 11BB was also claimed. The Revenue contended that Modvat Rules do not allow cash refunds except for exported goods. Section 11B of the Central Excise Act was cited to support this position.Issue 2: Legal Precedents and InterpretationThe Appellants referenced various legal decisions supporting their claim for cash refunds, emphasizing the inability to utilize credit due to factory closure. The Revenue distinguished these cases, asserting that the circumstances were different. The Tribunal's decision in the case of Rajashree Cements was cited, stating that refunds in cash are only permitted for exported goods. The Tribunal upheld the Commissioner (Appeals) decision, emphasizing the lack of provisions for cash refunds in Modvat Rules except for specific export scenarios.Conclusion:The Tribunal rejected the appeal, affirming the decision to grant a partial refund in cash and credit. It upheld the position that Modvat Rules do not generally allow cash refunds, except for specific export situations. The legal precedents cited by both parties were considered, with the Tribunal emphasizing the restrictions on cash refunds under the existing rules and regulations.
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