TaxTMI 
TaxTMI 
2015 (7) TMI 459
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....e for payment of BED and AED(GSI) on the finished products. The adjudicating authority confirmed the demand of reversal credit of Rs. 36,06,472/-. On appeal before Tribunal, the Tribunal ordered pre-deposit of Rs. 10 lakhs vide Stay Order No.365/2005 dt. 11.3.2005 [2005 (192) ELT 599 (Tri.-Chennai)]. In the meanwhile, the appellants opted to avail exemption under Notification No.30/2004-CE dt. 9.7.2004 on their textile products after reversing the credit on inputs in stock, inputs in process and finished products lying in stock as on 9.7.2004. Since there were not required to reverse balance unutilized credit of Rs. 30,60,023/- availed on the inputs which were used in the manufacture of textile goods already cleared on payment of duty prior to 9.7.2004, they have debited Rs. 10 lakhs from their cenvat credit balance lying in their account towards the pre-deposit ordered by the Tribunal. Subsequently appellant on their own paid the balance demand amount of Rs. 20,63,023/- + by debiting the remaining cenvat credit balance available with them. The Tribunal in their Final Order No.1337/2007 dt. 8.10.2007 [2008 (222) ELT 464 (Tri.-Che.)] accepted the department s stand on merits but set....
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....eal vide OIA No.32/2010 dt. 29.6.2010 and maintained status quo of the OIA No.101/09. Again Revenue preferred appeal E/601/2009 against OIA No.32/2010 on the same issue for the aforesaid reason. 6. Heard both sides. 7. Ld Advocate appearing on behalf of appellant-assessee in E/589/09 submitted a written synopsis and reiterated the same as a respondent in Revenue s appeal in E/601/09 and in E/498/09. As regards the assessee s appeal on the rejection of refund claim of Rs. 20,60,023/, he submits that the consequential refund was rejected on the ground that cenvat credit lapsed w.e.f. 1.3.2007 in view of amendment to Rule 11 of CCR 2004 wherein sub rule (3) of Rule 11 was inserted. He submits that sub-rule (3) of Rule 11 was introduced only w.e.f. 1.3.2007. and it cannot apply retrospectively for the period prior to 9.7.2004 and also submits that this rule will apply only to the cases where the notification exempts duty unconditionally whereas Exemption Notification No.30/04 availed by them is a conditional notification. He further submitted that sub-rule (3) had two sub-clauses (i) and (ii) and the Clause (ii) of sub-rule (3) is applicable only if the final products are exempted ab....
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....(192) ELT 399 (ii) CCE Ranchi Vs Ashok Arc. 2006 (193) ELT ELT 399 (Jhar.) (iii) Raymond Ltd. Vs CCE Mum. III 2011 (274) ELT 513 (Tri.-Mum.) 9. On the other hand, Ld. A.R. reiterated the impugned order and grounds of appeal (GOA) of Revenue appeals. He submits that appellant availed notification No.30/2004 where the goods are fully exempted. As per rule (3) of Rule 11 of CCR where the assessee opted for exemption, the credit remaining in balance automatically lapsed and they are not allowed to utilise the said credit for payment of duty on any final product. Notification No.30/04 was issued under Section 5A of Central Excise Act and grants full exemption on the textile yarn and textile products. He further submits that appellants have wrongly utilised the credit which was otherwise lapsed. This is a clear violation of Rule 11 (3) (ii). Once the credit is lapsed the appellant ordering payment of pre-deposit by using said credit is also not correct. Again the appellant paid Rs. 20 lakhs on their own and utilised the credit which was otherwise lapsed on 9.7.2004 . He submits that as on 9.7.2004 appellants had balance of Rs. 50,88,792/- of which they have reversed Rs. 20,28,769/- wh....
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.... Final order dt. 8.10.2007. On a perusal of above Tribunal s order, I find that Tribunal had accepted the department stand on merits but set aside the demand on the ground of limitation. The Deputy Commissioner of Central Excise in his order dt. 21.11.2008 had sanctioned the refund of pre-deposit of Rs. 10 lakhs (paid through cenvat credit) in cash and rejected the amount of Rs. 20,60,023/- voluntarily paid by them. LAA had rejected both assessee's and Revenue's appeals. Therefore both the Revenue and assessee's appeals arose out of D.C.'s order dt.21.11.2008. 11. On perusal of the impugned order, I find both the adjudicating authority and LAA while rejecting the refund of Rs. 20,60,023/- held that the appellants have utilized the credit which was remaining in balance as on 9.7.2004 and the said credit shall lapse on 9.7.2004 when the appellants availed exemption notification 30/04 dt. 9.7.2004. Revenue also relied on Rule 11(3) which came into force w.e.f. 1.3.2.007 vide Notfn 10/07 CE (NT). As per clause (ii) of sub rule (3) of rule 11, on the date of opting for exemption, assessees have to reverse the credit on inputs lying in stock, inputs in process and inputs....
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.... 2. .... .... 3. 52.04, 5205.11, 5205.19, 5206.11, 5206.12, 52.07, 52.08, 52.09 All goods Proviso to the above notification clearly stipulates that this notification shall not apply to cases in respect of which credit of duty availed on the inputs and capital goods. It is also on record that appellants while opting for exemption under the above notification had reversed the entire credit attributed to the inputs lying in stock, inputs in process, and inputs contained in the finished goods lying in stock. Even after complying such reversal they still had the balance credit in their account which is pertaining to the finished goods already cleared prior to 9.7.2004. On a plain reading of the notification No.30/04, it is evident that there is no such pre-condition envisaged in the notification that the credit remaining in balance as on the date of opting for full exemption shall lapse. Whereas the LA relied the transitional provision stipulated in Rule11 of CCR 2004 as amended and concluded that credit shall lapse. The sub-rule (3) was inserted in Rule 11 w.e.f. 1.3.2007. The Sub rule(1) & (3) of Rule 11 is reproduced as under :- "RULE 11.?Transitional provision. ....
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....vat account as on 9.7.2004 shall lapse is not justified, and valid and not in accordance with the Rules as existed during the relevant period. Further, it is evident that the credit lying in balance in the cenvat account is related to inputs which were utilized in the final products and already cleared on payment of duty. Therefore, in the absence of any specific provision in Notification No.30/04 or any other provision prior to 1.3.2007, there is no lapse of credit and the sub-rule(3) cannot be applied retrospectively for the period prior to 9.7.2004. 14. The appellants also contended that sub-rule (3) is not applicable in their case as the exemption notification No.30/04 is not an absolute exemption but only a conditional exemption. As seen from the notification No.30/04 reproduced above, this notification was issued under section 5A of Central Excise Act exempting textile fabrics from the whole of excise duty. The proviso to the notification stipulates that this exemption shall not apply to the goods in respect of which credit of duty on the inputs or capital goods has been taken under CCR. Therefore, it is evident that the Notification No.30/2004 is a conditional o....
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....as codified procedure for adjustment of duty liability against Modvat Account. That is required to be carried out In accordance with law and unadjusted amount is not expressly permitted to be refunded. In absence of express provision to grant refund, that is difficult to entertain except in the case of export. There cannot be presumption that in the absence of debarment to make refund in other cases that is permissible. Refund results in outflow from treasury, which needs sanction of law and an order of refund for such purpose is sine qua non. Law has only recognized the event of export of goods for refund of Modvat credit as has been rightly pleaded by Revenue and present reference is neither the case of otherwise due of the refund nor the case of exported goods. Similarly absence of express grant in statute does not imply ipso facto entitlement to refund. So also absence of express grant is an implied bar for refund. When right to refund does not accrue under law, claim thereof is inconceivable. Therefore, present reference is to be answered negatively and in favour of Revenue since refund of unutilized credit is only permissible in case of export of goods and for no other reason....