2019 (7) TMI 564

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....subjecting the manufactured product, which otherwise was outside the net of duties of central excise, to a specified rate to enable availment of CENVAT credit. Normally there is no option to be burdened with duty on exempted goods. The appellant had accumulated CENVAT credit till 31st March 2006 before reverting to full exemption as provided for in notification no. 30/2004-CE dated 9th July 2004. Appellant sought refund of accumulated, and unused, credit of Rs. 1,28,04,392/- under rule 5 of CENVAT Credit Rules, 2004 which was rejected by the original authority and the rejection was upheld in order-in-appeal no. Th-I/RKS/01/2011 dated 8th June 2011 of Commissioner of Central Excise (Appeals), Mumbai - I leading to the present proceedings. ....

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.... Government of India. 5. It is seen that, in re Jain Vanguard Polybutylene Ltd, the Hon'ble High Court of Bombay was persuaded that judicial discipline stood in the way of taking inconsistent stand on identical questions. In the order of the Tribunal that was appealed against therein, reliance has been placed on the decision of the Hon'ble High Court of Karnataka in Union of India v. Slovak India Trading Co Pvt Ltd [2006 (201) ELT 559 (Kar.)]. 6. Learned Authorised Representative relies upon the decision of the Tribunal in Commissioner of Central Excise, Mumbai v. Hindoostan Spinning and Weaving Mills Ltd [2016-TIOL-1589-CESTAT-MUM] in which the dispute related to accumulated CENVAT credit being ineligible for refund under rule 5 of C....

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....by the manufacturer which is made operational by adjustment of duty computed on total value with the duties discharged on the inputs, input services and capital goods used for such manufacture. It was squarely held that the cessation of operation by a manufacturer eliminates the burden of duty liability and, thereby, eliminates the statutory obligation to allow such adjustments. With closure of operation, continuing with the accumulated CENVAT credit becomes redundant. It was also held that pleas for refund assume that CENVAT Credit Rules, 2004 is an exemption scheme; if it were, the Rules would have been issued under the authority of section 5A of Central Excise Act, 1944 and section 93 of Finance Act, 1994 instead of general 'rule making ....