Cash refund of unutilised Cenvat credit on factory closure is not admissible absent express statutory permission.

Unutilised Cenvat credit remaining in a factory's account on closure of manufacturing operations is not refundable in cash unless the governing statutory scheme expressly permits it. The article states that a cash refund is not admissible under Rule 5 of the Cenvat Credit Rules, 2004 or under Section 11B of the Central Excise Act, 1944, and treats this position as settled by the Full Bench ruling in Gauri Plasticulture Pvt. Ltd. It also notes that the earlier order in Slovak India Trading Pvt. Ltd. cannot be treated as a declaration of law under Article 141. On that basis, the refund claim fails.

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Issues: Whether cash refund of accumulated Cenvat credit lying unutilised on closure of the factory is admissible under Rule 5 of the Cenvat Credit Rules, 2004 or under Section 11B of the Central Excise Act, 1944.

Analysis: The issue was treated as settled by the Full Bench of the Bombay High Court in Gauri Plasticulture Pvt. Ltd., which answered in the negative the questions whether cash refund can be granted where credit remains unutilised and whether Section 11B can be invoked to refund unutilised Cenvat credit on closure of manufacturing activities. The ruling further held that the earlier Supreme Court order in Slovak India Trading Pvt. Ltd. cannot be read as a declaration of law under Article 141 of the Constitution of India. Applying that binding principle, the accumulated credit remaining in the appellant's account on closure of the factory was not refundable in cash.

Conclusion: Cash refund of accumulated Cenvat credit on closure of the factory is not admissible under Rule 5 of the Cenvat Credit Rules, 2004 or under Section 11B of the Central Excise Act, 1944, and the claim fails in favour of the Revenue.

Ratio Decidendi: Unutilised Cenvat credit cannot be refunded in cash merely because the manufacturing unit has closed, unless the governing statutory scheme expressly permits such refund.

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