Custom, Excise & Service Tax Tribunal
Cce, Jallandhar vs M/S. S.K. Sacks Pvt. Ltd on 29 July, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 1144 OF 2007-SM [Arising out of Order-in-Appeal No. 331-CE/Appl/Jal/2006 dated 9.11.2006 passed by the Commissioner (Appeals), Central Excise, Jallandhar] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Departmental authorities? CCE, Jallandhar Appellant Vs. M/s. S.K. Sacks Pvt. Ltd., Respondent
Appearance:
Shri V.K. Saxena, Jt. C.D.R. for the Revenue; None (written submissions) for the respondents Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 29th July, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
Revenue filed this appeal against order of the Commissioner (Appeals) whereby it has been held that the respondents are entitled to refund of unutilized credit of Rs. 4,98,588/- in cash.
2. Relevant facts of the case, in brief, are that the respondents filed a refund claim of pre-deposit amounting to Rs. 6,58,588/-. The original authority sanctioned the refund claim and the amount of Rs. 4,98,588/- was allowed to take credit in Cenvat account. The respondents filed application to the original authority to grant refund of the said amount in cash as their factory was closed in June, 2003 and they have already surrendered their central excise registration in June, 2003 itself. Original authority rejected their prayer. The respondents filed appeal before the Commissioner (Appeals) which was allowed. Hence, the Revenue filed this appeal.
3. Learned Jt. CDR submits that Rule 5 of Cenvat Credit Rules would not allow the refund of Cenvat credit in cash. He further submits that the respondents debited this amount from their Cenvat account and, therefore, they are not eligible to get the refund in cash. In this context, he relied upon the decision of the Honble Punjab & Haryana High Court in the case of Nahar Industrial Enterprises Ltd. vs. UOI, reported in 2009 (91) RLT 212 (P&H). He further submits that the Larger Bench of the Tribunal in the case of Gauri Plastic Culture (P) Ltd. vs. CCE, Indore, reported in 2006 (202) ELT 199 (Tri.-Mum.) held that if the assessee is maintaining Modvat credit and is in a position to use the same in future clearances, it should be normally credited back in the same account from where it was debited i.e. RG-23A, Part II account.
4. The respondents filed written submissions and requested to decide the matter in their absence. The respondents relied upon the decision of the Tribunal as under:-
(1) DCM Fabrics vs. CCE, Jaipur 2009 (239) ELT 139 (Tri.-Del.); (2) CCE, Jaipur vs. Talforge Pvt. Ltd. 2009 (239) ELT 172 (Tri.-Del.)
5. After hearing learned Jt. CDR and on perusal of the records, I find that the Commissioner (Appeals) allowed the unutilized credit of Rs. 4,98,588/- in cash because it is a case of closure of factory of the respondents and the respondents are not able to utilize this amount, if it is credited to their Cenvat credit account. The Tribunal in the case of DCM Fabrics (supra) following the decision of the Honble Karnataka High Court in the case of UOI vs. Slovak India Trading Co. Pvt. Ltd., reported in 2006 (201) ELT 559 (Kar.) held that the assessees factory is closed and surrendered their central excise registration and the Cenvat credit would be refunded in cash. I find that the Commissioner (Appeals) also allowed the refund in cash following the decision of the Honble Karnataka High Court. Learned Jt. CDR relied upon the decision of the Honble Punjab & Haryana High Court in the case of Nahar Industrial Enterprises Ltd. (supra) wherein duty paid partly in cash through PLA and partly by debiting Cenvat Credit account. Honble High Court held that Cenvat credit amount is to be refunded by way of credit in Cenvat credit account. In the present case, the respondent factory is closed and there is no scope for utilization of credit in the Cenvat credit account. So, the facts in the present case does not resemble with the facts of the decision of the Punjab & Haryana High Court and, therefore, the said decision will not apply in the present facts and circumstances of the case.
6. In view of the above discussion, I do not find any reason to interfere with the order of the Commissioner (Appeals). Accordingly, appeal filed by the Revenue is rejected.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK 4