TaxTMI 
TaxTMI 
2025 (3) TMI 1134
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.... March 2011. A Show Cause Notice was issued to the appellant proposing to reject the refund by stating that since there was no export clearance made by the appellant, the refund would not be eligible under Rule 5 of the CENVAT Credit Rules, 2004 (CCR). After due process of law, the Ld. Adjudicating Authority rejected the refund claim. In appeal, the Ld. Commissioner (Appeals) upheld the adjudication order. Hence this appeal. 3. Shri S. Venkatachalam, Ld. Advocate appeared for the appellant and Shri Sanjay Kakkar, Ld. Authorized Representative appeared for the respondent. 3.1 The Ld. Counsel submitted that; a) Cash refund covers both PLA and CENVAT Credit balance and there is no prohibition for cash refund of CENVAT credit which is also duty as defined in the definition itself. b) To hold that the benefit of refund of unutilized CENVAT credit is not available for the units engaged in the manufacture and clearance of goods for home consumption is contrary to Rule 5 of CCR and the interpretation given in the show cause notice itself. c) Section 11B of the Central Excise Act 1944 (CEA), itself covers the refund and hence there is no necessity to invoke Rule 5 of d) Th....
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.... PVT. LTD. vs CC.EX., 2021 (378) E.LT. 444 (Tri-Chennai) xvii. CENTURY RAYON - TWISTING UNIT vs CC.EX., 2015 (325) E.L.T. 205 (Tri, Mumbai) xviii. BANGALORE CABLES P. LTD. vs CC.EX., - 2017 (347) E.L.T. 100 (Tri. -Bang.) xix. USV PVT. LTD. vs CCE & ST-(2023) 5 Centax 7 (Tri.-Ahmd) 3.2 The Ld. AR stated on behalf of revenue took us through the impugned order. He stated that perusal of rule 5 of the CCR read with Notification No 05/2006-CE(N.T.), dated 14/03/2006 which provides the procedure for the claim, indicates that refund of CENVAT credit in terms of the said rule is permissible only when there is a clearance of a final product of a manufacturer or of an intermediate product for export without payment of duty under a bond or letter of undertaking. Rule 5 has been substituted with effect from 1st April 2012. Prior to such substitution there was nothing in Rule 5 permitting refund of un-utilised credit. He referred to the judgment of the Hon'ble Bombay High Court in M/S. GAURI PLASTICULTURE P. LTD. Vs THE COMMISSIONER OF CENTRAL EXCISE, INDORE [2019 (30) G. S. T. L. 224 (Bom.)] and Tecumseh Products India (P. ) Ltd. Vs Commissioner of Central Tax, Hy....
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....on Of India [WP(C) NO. 37039 OF 2023, Dated: 04/06/2024], the Hon'ble Kerala High Court held as under; 71. The Input Tax Credit is in the nature of a benefit or concession extended to the dealer under the statutory scheme. Even if it is held to be an entitlement, this entitlement is subject to the restrictions as provided under the Scheme or the Statute. The claim to Input Tax Credit is not an absolute right, but it can be said that it is an entitlement subject to the conditions and restrictions as envisaged in Sections 16(2) to 16(4), Section 43, and Rules made thereunder. 72. In the case of Godrej & Boyce Manufacturing Company Pvt. Ltd & others v. Commissioner of Sales Tax & others [(1992) 3 SCC 624], the Supreme Court, while dealing with Rules 41 and 41A of the Bombay Sales Tax Rules 1959, held that the rule-making authority would be empowered to provide for abridgement or curtailment while extending a concession. (emphasis added) I hence find that an eligibility criterion to get refund calls for a strict construction. 6. I find that the issue raised in this appeal and those cited in the judgments relied upon by the appellant, was examined by a 3 Judge....
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....y existed prior to 10th September, 2004 and remaining un-utilised on that day shall be allowed as Cenvat Credit to such manufacturer or provider of output service under these rules, and be allowed to be utilised in accordance with these rules. This is how the transitional provision enables carrying forward of the un-utilised Cenvat Credit. That is a distinct contingency altogether. That transitional provision does not enable us to hold that the amount of un-utilised Cenvat Credit can be refunded in cash. 29. We do not think that by taking assistance of this provision, we will be able to hold as contended by Mr.Patil that the Cenvat Credit can be refunded even in relation to those inputs which have not been used in the manufacture of the final product or the exported goods. We are called upon to read something in the substantive rule and which is totally absent therein. When Rule 5 follows Rule 4, which is titled as "Conditions for Allowing Cenvat Credit", then, we must understand the scheme in such manner as would make the law workable and consistent. Refund of Cenvat Credit in terms of Rule 5 is permissible only when there is a clearance of a final product of a manufactur....
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....Cenvat) or the unit is closed. This is the reasoning in the tribunal's order and though the appeal of the Revenue before the High Court of Karnataka at Bengaluru raised several grounds and pleas, the High Court referred to the arguments and in para 4 of its order, reproduced Rule 5 of the Cenvat Credit Rules, 2002. In para 5, the reasoning of the High Court of Karnataka reads thus:- "5. There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case on hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly rules by the Tribunal. The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee." 32. Thus, the High Court of Karnataka took the view that there is n....
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....f the Hon'ble Rajasthan High Court in the case of Welcure Drugs and Pharmaceuticals Ltd. vs. Commissioner of Central Excise, Jaipur reported in 2018 (15) GST Law Times Page 257. There, the Hon'ble Rajasthan High Court concluded that the Revenue cannot seek to urge before that High Court that the view taken by four different High Courts approving the order of CESTAT has lost its persuasive value, particularly when the Special Leave Petitions against the view taken by four different High Courts were either not filed or filed but not entertained. Thus, the tribunals have taken a consistent view and the Revenue could not succeed in having that set aside. It is in these circumstances, the Rajasthan High Court negatived the contention of the Revenue that the tribunal under the jurisdiction of that High Court could have distinguished the orders and judgments of its Benches. That was found to be contrary to the judicial discipline. It is in these circumstances so also when there was a larger Bench view of the tribunal having a binding effect, that the principle of judicial discipline was pressed into service. 36. After the view taken in Steel Strips Ltd. (supra) and which was also....
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.... how the principle of merger cannot be invoked in this case. In the order passed in the case of Jain Venguard (supra), the question of law was expressly kept open. Hence, the earlier view of the tribunal does not merge with dismissal of the Special Leave Petition in the case of Slovak India (supra). Hence, this principle has also no application. 40. As a result of the above discussion, we answer the questions of law framed above as (a) and (b) in the negative. They have to be answered against the assessee and in favour of the Revenue. Questions (a) and (b) having been answered accordingly, needless to state that the order of the Hon'ble Supreme Court in the case of Slovak India (supra) cannot be read as a declaration of law under Article 141 of the Constitution of India. (emphasis added) 7. The judgment of the Hon'ble Bombay High court in GAURI PLASTICULTURE (supra), discusses the legal issues and the judgments cited by the appellant, comprehensively. It thus merits to be followed. Thus, it is concluded that rule 5 of CCR read with Notification No 05/2006-CE(N.T.), as it then stood, i.e. prior to 01.04.2011, does not permit the refund of credit which is not on accoun....