2022 (3) TMI 186

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.... theirs in Haryana, transferred the 'capital goods' and 'raw materials' in stock on payment of appropriate duty after intimation to central excise authorities but their request for transfer of accumulated balance of Rs. 16,77,371/- as on 31st June 2017 in CENVAT credit account was denied on the ground that such transfer is not contemplated in CENVAT Credit Rules, 2004. A claim for refund of this amount was filed under section 11B of Central Excise Act, 1944 which was rejected by the original authority. Thereafter, Commissioner of Central Tax (Appeals -I), Pune, vide order-in-appeal no. PUNEXCUS- 001-APP-576/18-19 dated 31st December 2018, confirmed the rejection of the claim for refund but, nonetheless, directed that the procedure prescribe....

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....ods to have been cleared under authority of law if discharged by payment or by utilisation of credit; this flows from the authority to levy and collect duty of excise in section 3 of Central Excise Act, 1944. '8. Thus the scheme, with the avowed objective of preventing the cascading effects of tax, allows discharge of tax liability from two sources: the cash deposit known as 'account current' and from the credit of the tax already collected from the production chain known as 'CENVAT credit account' with the latter as an option to be used fully or partially in each instance. This is also in pursuance of the constitutional power to tax manufacture and provides the mechanism to restrict the actual payment to the contribution of an assessee t....

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....e Act, 1994. The Rules are issued under section 37 of Central Excise Act, 1944 and section 94 of Finance Act, 1994 to operationalize section 3 of the former and section 66 of the latter. 11. Moreover, the conversion of credit into cash would be a refund to the buyer of the tax collected under authority of law from a manufacturer-seller. Refund in tax statute is the return of a tax collected without authority of law and, hence, not validly retainable with the exchequer. Refund of such accumulated credit arising from payment of duty or tax at the stage of manufacture is tantamount to a finding that the duty or tax was collected at the preceding stage without the authority of law. That is certainly not, and can never be, the contention of th....