CENVAT credit refund on factory closure is unavailable after the amended Rule 5 framework, and the notice-based challenge failed.

After 01.04.2012, refund of unutilized CENVAT credit is confined to the situations expressly covered by Rule 5 of the Cenvat Credit Rules, 2004 read with Section 11B of the Central Excise Act, 1944, and cannot be claimed merely because a factory has closed. The pre-amendment case law was held inapplicable to the amended regime, so closure of the unit did not by itself create a refund entitlement. The objection that the rejection order travelled beyond the show cause notice was also rejected because the notice and the orders proceeded on the same statutory basis.

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Issues: (i) Whether refund of unutilized CENVAT credit on closure of the factory is admissible after the amendment to Rule 5 of the Cenvat Credit Rules, 2004 with effect from 01.04.2012; (ii) Whether the rejection of refund travelled beyond the show cause notice.

Issue (i): Whether refund of unutilized CENVAT credit on closure of the factory is admissible after the amendment to Rule 5 of the Cenvat Credit Rules, 2004 with effect from 01.04.2012.

Analysis: Section 11B(2)(c) of the Central Excise Act, 1944 makes refund of credit subject to the rules and notifications issued under the Act. The amended Rule 5, applicable from 01.04.2012, confines refund of CENVAT credit to specified export situations and does not provide for refund merely because the factory has closed. The prior line of cases relied upon by the appellant pertained to the pre-amendment regime and was held inapplicable.

Conclusion: The refund on closure of the factory was not admissible and the finding is against the assessee.

Issue (ii): Whether the rejection of refund travelled beyond the show cause notice.

Analysis: The show cause notice specifically proposed rejection of the claim under Rule 5 of the Cenvat Credit Rules, 2004 read with Section 11B of the Central Excise Act, 1944. The impugned orders proceeded on the same statutory basis and did not introduce a new ground outside the notice.

Conclusion: The contention that the orders travelled beyond the show cause notice was rejected and the finding is against the assessee.

Final Conclusion: The appeal failed on merits because the post-amendment refund framework did not permit refund of accumulated credit on mere closure of the unit, and no procedural infirmity in the rejection order was established.

Ratio Decidendi: After 01.04.2012, refund of unutilized CENVAT credit is available only within the confines of Rule 5 of the Cenvat Credit Rules, 2004 and cannot be claimed solely on closure of the factory unless the rule itself provides for such refund.

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