2016 (11) TMI 147

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..... Heard both sides and perused the records. 3. The relevant facts that arise for consideration are the appellants were engaged in fabrication of MS pipes for use in irrigation. They paid the duty during the relevant period on being directed by the Revenue. They successfully contested that the duty liability does not arise which was held so by the Tribunal by an order dated 22.11.2002. Consequent to such order, two refund claims were filed and in the refund claims, they prayed for refund of the amount in cash as the fabrication of the work of MS pipe has been completed. The adjudicating authority, after due process of law, sanctioned the refund to the appellant but directed them to take recredit of the same in the cenvat account and sanct....

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....hat identical issue was before the Tribunal s Larger Bench in the case of Gauri Plasticulture (P) Ltd. (supra). The Larger Bench in paragraphs 8, 9, 10 & 11, held as under:- "8. Detailed reading of the above judgments, leads in to the fact that wherever the assessee was unable to utilize the credit on account of objection raised by the Department or actions taken by them by way of initiation of proceedings or paid duty out of modvat account at the Department s insistence, and for that reason, he had to pay duty in cash or out of the PLA, they would be entitled to refund of that credit in cash, on the dispute being ultimately settled in their favour. In the decisions holding that such refund in cash is not possible, it has been obse....

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.... such refund in cash makes the assessee enrich because during the period when the dispute was pending, they had not paid any duty in cash and as such, the debit entry in Modvat account would have made no difference, as the credit would have been lying unutilized only in the account, such credit, cannot be refunded in cash. 10. In view of the foregoing discussions, we hold that if denial of credit has compelled an assessee to pay duty out of PLA, the refund of the same would be admissible in cash to the extent of payment of duty in cash during that period. However, if no cash payments towards duty were made through PLA and the credit would have remained unutilized in the account books, such credit cannot be allowed by way of cash. ....