Custom, Excise & Service Tax Tribunal
M/S Mittal Filaments P Ltd vs Commissioner Of Central Excise on 28 January, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad -ooOoo- Appeal No. : E/867/2008 E/1213/2008 [ Arising out of i) OIA-KKS/214/DAMAN/2008 dtd 22.4.2008 and ii) OIA-KKS/271/DAMAN/2008 dtd 30.7.2008 passed by Commissioner of Central Excise, CUSTOMS & Service Tax (Appeals) DAMAN ] 1. M/s Mittal Filaments P Ltd - Appellant(s) 2. M/s Triveni Rayons P Ltd Vs. Commissioner of Central Excise, CUSTOMS & Service Tax (Appeals) DAMAN - Respondent (s)
Represented by For Assessee : Shri Mukund Chauhan, Advocate For Revenue : Shri J Nagori, Authorised Representative For approval and signature :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 28/1/2016 ORDER No. A/10069-10070/2016 dtd 28/1/2016 Per : Mr.P.K. Das, Common issue involved in these appeals and therefore both are taken up together for disposal.
2. After hearing both the sides and on perusal of the records, we find that the appellants were engaged in the manufacture of Texturised Yarn. They opted benefit of the exemption Notification No 30/2004-CE dtd 9.7.2004. The condition of the notification is that the appellants are not entitled to avail the Cenvat Credit on the Input. M/s Mittal Filaments P Ltd and M/s Triveni Rayon Pvt Ltd opted exemption notification on 27.3.2006 and 4.4.2006 respectively. Both the appellants filed refund claims on unutilized balance of Cenvat Credit under Rule 5 of the Cenvat Credit Rules 2004.
3. Both the authorities below observed that Rule 5 of the said Rules would be applicable in respect of clearance of the goods for export. The Ld Counsel on behalf of the appellants submits that the issue involved in this case is covered by the decision of the Honble Karnataka High Court in the case of Union of India Vs Solvak India Trading Co Pvt Ltd 2006(201)ELT.559 (Kar.) which was upheld by the Honble Supreme Court as reported in 2008(223)ELT.A170(SC). He further submits that the Division Bench of the Tribunal in the case of Raymonds Ltd vs CCE, Mumbai III 2011(273)ELT.582 (Tri. Mum) allowed the appeal on the identical issue following the decision of the Honble Karnataka High Court.
4. The Ld Authorised Representative for the Revenue submits that the Larger Bench of the Tribunal in the case of Steel Strips Vs CCE, Ludhiana 2011(269)ELT.257(Tri. LB) on the identical issue answered the reference in favour of the Revenue. He submits that the Larger Bench of the Tribunal in the said case considered the decision of the Honble Karnataka High Court. He further submits that the division Bench of the Tribunal in a recent decision in the case of Modipon Ltd vs CCE, Ghaziabad 2015(324)ELT.718 (Tri Del) following the decision of the Larger Bench in the case of Steel Strips (Supra) rejected the appeal of the assessee. For the proper appreciation of the case, we reproduce the relevant portion in the case of Modipon Ltd (supra) as under:
6.?We have considered the submissions from both the sides and perused the records. There is no dispute that the appellants factory stopped production sometime in June, 2007 and at that time there was Cenvat credit balance of Rs. 2,35,86,612/- in their RG 23A Part-I and RT-23C pt. II account. In the appellants application dated 27-11-2007, cash refund of the above Cenvat credit is sought by invoking Section 11B(2)(C). In our view, Section 11B is only for the refund of the duty paid either through cash or through Cenvat credit or of the Cenvat credit wrongly reversed which refund of duty paid either through cash or through Cenvat credit account is subject to the bar of unjust enrichment, the refund of wrongly reversed Cenvat credit is not subject to the bar or unjust enrichment. But this section cannot be invoked for cash refund of the unutilized Cenvat credit lying in the Cenvat credit account of a manufacturer at the time of closure of the factory. In fact, other than Rule 5 of the Cenvat Credit Rules, 2004, there is no provision either in Central Excise Act, 1944 or in any Rules made thereunder for cash refund of accumulated Cenvat Credit Rules, 2004. When a factory closes down, the Cenvat credit lying unutilized in its Cenvat credit account would lapse, unless the factory resumes production. In the event of the factory being taken over by another person, and resuming production, Rule 10 permits the transfer of Cenvat credit to the new owner subject to certain conditions. But there is no provision for cash refund of such unutilized credit.
7.?Rule 5 of the Cenvat credit rules permits cash refund of accumulated Cenvat credit only in the following circumstances :-
(1) The Cenvat credit which has accumulated and whose cash refund is sought is in respect of inputs/input services used in the manufacture of finished goods which have been exported out of India under bond or letter of undertaking or used in intermediate products cleared for export. (2) The assessee is not in a position to utilize the Cenvat credit for payment of duty on finished goods cleared for home consumption or cleared for export under rebate claim. (3) The exports have not been made by claiming drawback or input duty rebate.
8.?In the present case, none of the above conditions are satisfied. Therefore, the Commissioner (Appeals) has rightly upheld the rejection of the cash refund of the accumulated credit. We are supported in our view of the Larger Bench judgment of the Tribunal in the case of Steel Strips (supra).
5. In the present case, we find that the refund of the unutilised Cenvat Credit is not arising out of the export of the goods. Hence, we do not find any infirmity in the impugned order. Accordingly, both the appeal filed by the appellants are rejected.
(Dictated and pronounced in the Court)
(P.M. Saleem) (P.K. Das)
Member (Technical) Member (Judicial)
swami
??
??
??
??
2