TaxTMI 
TaxTMI 
2009 (12) TMI 420
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....mounts but ordered payment through recredit to the cenvat credit account. In other words both the refunds were sanctioned by recredit to the cenvat credit amount of the respondent, while the respondent had pleaded for refund in cash. The Assistant Commissioner had ordered the refunds through recredited in the cenvat account on the ground that both the amounts of pre-deposit have been paid by way of debit in the cenvat credit account and not through PLA. The respondent filed appeals before the Commissioner (Appeals) and in the appeals also prayed for interest on the refund amount for the period of delay. It was pleaded before CCE (Appeals) that when amounts have been paid through cenvat credit, the unit was functional, but by the time these amounts became refundable, the unit has closed down and had shifted to Baddi, where the unit avails of hill area exemption and cannot avail cenvat credit and that the unit, therefore; was not in a position to utilize to utilize any cenvat credit. The Commissioner (Appeals) vide order-in-appeal No. 126-127/CE/DLH/07 dated 16.11.2007 allowed the cash refund, of these amounts and besides this, following the judgement of Hon'ble Supreme Court in the ....
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.... held that when any amount of duty is paid through cenvat credit it is to be refunded only by way of recrediting to the cenvat credit account. On the issue of interest for the period of delay beyond three months from the date of filing of the refund application learned DR pleaded that the refund application for the amount of Rs. 10 lakhs had been made on 17.8.2005 and the second refund application for refund of amount of Rs. 1 lakh have been made on 6.7.2006 and in respect of first refund application for Rs. 10 lakhs, the order was passed by the Assistant Commissioner on 17.8.2005 and in respect of the second refund application the order was passed on 3.11.2006 and as such in respect of the first refund the interest is payable only from 16.11.2005 upto the date of the order of Assistant Commissioner and in respect of second refund application, the interest is payable from 5.10.2006 upto the date of the Assistant Commissioner's order sanctioning the refund. He also pleaded that once the Assistant Commissioner has passed the order crediting the refund amount to the respondent's, cenvat credit account, they should have taken the credit in their cenvat credit account on the basis of th....
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.... of the refund application. In view of the above, he pleaded that the impugned order passed by the Commissioner (Appeals) is correct and there is no merit in the Revenue's appeal. 4. I have carefully considered the submissions from both the sides and perused the records. As regards the plea of the learned DR that since the total amount involved in this appeal is Rs. 11 lakhs single bench is not competent to hear the matter, there is not a correct plea as there are two orders-in-original of Assistant Commissioner involving refund of Rs. 10 lakhs and Rs. 1 lakh, the appeals against which were disposed off by the CCE (Appeals) by a common order-in-appeal No. 126-127/CE/DLH/07 dt. 16.11.07 and though Revenue has filed only one appeal against this common order-in-appeal, the same has to be treated as two appeals against two separate orders involving amounts of Rs. 10 lakhs and Rs. 1 lakh. 5. The respondent had made pre-deposit in pursuance of two separate stay orders of the Tribunal directing them to make pre-deposit of Rs. 10 lakhs and Rs. 1 lakh. Subsequently, when those appeals were decided by the Tribunal, the amounts of pre-deposit made by them became refundable. The respondent h....
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....ut if denial of credit has compelled an assessee to pay duty out of PLA, refund of such credit would be admissible in cash only to the extent of payment of duty in cash during the period, but if no cash payments were made, towards duty through PLA and the credit would have remained unutilised in the account books, such credit can not be refunded in cash. But this is not a case of refund of credit but is a case of refund of duty paid through cenvat credit account. In this regard, the Tribunal in para 5 of this judgement has held that - "on success of their claim subsequently, if the assessee is maintaining modvat credit account and is in a position to use the same towards payment of duty on the further clearances, it should normally be credited to the same account from which it was debited i.e. RG-23A Part.II account. However, if the assessee is not able to use the credit on account of any reason (which may be closure of the factory, final products being exempted etc.), the refund becomes admissible in cash". In the case of Kundalia Industries (supra) cited by the respondent it has been held that even when initially the duty has been paid through cenvat credit account, its refund ca....