TaxTMI 
TaxTMI 
2014 (10) TMI 677
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.... Rs. 35,49,815/- filed by the appellants. 3. Brief facts are that the appellants were manufacturing Aluminium Alloys and Zinc Alloys at their Khopoli factory. They sold their assets i.e. land and building etc. vide Sale Deed dated 28.12.2010 to M/s New Age Fire Protection Industries Pvt. Ltd. and also sold the stock of unutilized raw material and finished goods. The Central Excise registration was surrendered to the Central Excise department on 03.01.2011. At that time there was a credit balance of Rs. 35,49,815/- in the CENVAT account maintained by the appellants, refund of which was claimed by them under Rule 5 of the Cenvat Credit Rules, 2004. The refund claim was made on the ground that Rule 5 states that CENVAT Credit of inputs or input services used in manufacture of final products which are exported may be utilized for payment of excise duty on final products cleared for home consumption and "where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such-amount ..........." It was held by the adjudicating authority that Rule 5 does not provide any legal basis to grant cash refund of unutilized credit ....
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.... In the case of Slovak India Co. Pvt. Ltd. (supra), the decision of the Karnataka High Court was even affirmed by the Hon'ble Apex Court (supra) and the department's SLP was dismissed and, therefore, the sub-ordinate courts have to interpret the law as held by the Hon'ble Apex Court. The appellants have also stated that the purchaser of their factory i.e. M/s New Age Fire Protection Industries Pvt. Ltd. issued a letter stating that all benefits, entitlements and liabilities arising prior to 28.12.2010 shall be solely to the account of appellants only. 5.2 The learned Counsel emphasized that notwithstanding later decision of the Larger Bench in the case of Steel Strips v. Commissioner of Central Excise Ludhiana -2011 (269) ELT 257 (Tri. LB) which held that refund in such cases is not permissible, the decision of the High Courts and the Apex Court will rule. 6. Revenue on the other hand, have relied upon the Larger Bench decision in the case of Steel Strips (supra) and the decision in the case of Birla Corporation vs. CCE -2011 (274) ELT 529 (Tri.Mum). 7. We have carefully considered the submissions made by both sides. We find that the issue is regarding the correct in....
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....n any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Govt. by notification. The words "such adjustment" have to be read in context of the whole sentence. The words "where for any reason such adjustment is not possible" can only imply that refund in cash may be granted only when the CENVAT Credit cannot be adjusted against duty on final products cleared for home consumption or for export on payment of duty. Any other interpretation would be against the scheme of CENVAT Credit which is to prevent cascading in taxation. If the appellants' contention that refund may be granted on closure of factory is held to be valid, then there may be cases when the inputs are not even used in manufacture of the final product. Grant of refund in such cases would lead to an illogical result -that is, the duty paid on inputs is being refunded without their use in the manufacture of final products. This will amount to refund of Central Excise duty paid which has no basi....
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.... India (supra), the Apex Court while dismissing SLP of Union of India stated that in view of the concessions made by learned ASG, the SLP is dismissed. In this case, the ASG had conceded that appeals were not filed against adverse decisions of Tribunal. While referring to judicial decisions on this matter, on the issue of doctrine of merger it was held by the Larger Bench that - 5.5 Doctrine of merger was pressed into service by the Id. Sr. Counsel Sri Anand appearing on behalf of the Assessee submitting that due to dismissal of Revenue's Civil Appeals, present reference was unwarranted. For appreciation of Doctrine of merger, it would be beneficial to reproduce Paras 40 - 44 of the judgment of the Hon'ble Supreme Court laying down the law in the case of Kunhayammed V. State of Kerala - 2001 (29) ELT 11 (SC)) as under: "40. A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it may be rejected (i) as barred by time, or (ii) being a defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disenti....
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....y at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court. However this would be so not by reference to the doctrine of merger. 41. Once a special leave petition has been granted, the doors for the exercise of appellate jurisdiction of this Court have been let open. The order impugned before the Supreme Court becomes an order appealed against. Any order passed thereafter would be an appellate order and would attract the applicability of doctrine of merger. It would not make a difference whether the order is one of rev....
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....jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. First stage is up to the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal is granted and special leave petition is converted into an appeal. (iii) Doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment-decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter. (iv) An order refusing special leave to appe....
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....ld not be a ground for refusing to consider the matter on its own merit. Merely because in some cases revenue has not preferred appeal that does not operate as a bar for the revenue to prefer an appeal in another case where there is just cause for doing so or it is in public interest to do so or for a pronouncement by the higher Court when divergent views are expressed by the Tribunals or the High Courts as has been held in the case of C K Gangadharan vs CIT, Cochin, reported in 2008 (228) ELT 497 (SC) = 2009 (16) S.T.R. 659 (S.C.). In Gauri Plasticulture (P) Ltd. (supra) except the claim being permitted under equitable considerations the controversy remained unanswered on the point of law while grant of refund of the nature claimed was not mandate of the Act or the 1994 Rules. The issue, therefore is rightly called for consideration in the present reference on the point of law. 7.5 The Learned Counsel drew our attention to the decision of Bombay High Court (in WP 558 of 2013) dated 13.9.2013, in their own case presently being dealt by us. The appellants had approached the High Court against CESTAT Order dated 06.11.2012 which rejected their appeal for early hearing. The Hon'b....