Custom, Excise & Service Tax Tribunal
Cce & St, Lucknow vs Jai Ganpati Metals on 4 March, 2015
CUSTOMS, EXCISE & SERVICE TAXAPPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. SINGLE MEMBER BENCH Appeal No.E/2943/2011-EX(SM) [Arising out of the Order-in-Appeal No.238-CE/LKO/2011 dt.20.9.11 passed by the CCE (Appeals), Lucknow) Date of Hearing/Decision: 04.03.2015 For Approval &signature: HonbleMr.Ashok Jindal, Member (Judicial) 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 would be released under Rule 27 of the 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 Department Authorities? Yes CCE & ST, Lucknow Appellant Vs. Jai Ganpati Metals Respondent
Appearance Shri R.K.Mishra, AR for the appellant Shri Raj Kumar, CA Advocate for the respondent CORAM: HonbleMr.Ashok Jindal, Member (Judicial) FINAL ORDER NO.50819/2015 Per Ashok Jindal :
The Revenue is in appeal against the impugned order wherein the Commissioner (Appeals) has allowed the cash refund of unutilized credit lying in cenvat account on closure of their factory under Rule 5 Cenvat Credit Rules, 2004 read with section 11B of Central Excise Act, 1944.
2. Ld.AR has relied on the larger bench decision of the Tribunal in the case of Steel Strips vs.CCE, Ludhiana-2011 (269) ELT 257 (Tri.-LB), this Tribunal has held that there is no provision under Rule 5 of Cenvat Credit Rules, 2004 to allow refund lying unutilized in cenvat account on closure of the factory.
3. On the other hand, learned Consultant for the respondent relied on the decision of Honble Karnataka High Court in the case of Slovak India Trading Co.Pvt.Ltd.-2006 (201) ELT 559 (Kar.) wherein Honble Karnataka High Court has framed the following three issues:-
(a) Whether under the facts and circumstances of the case the Tribunal is right in ordering for refund even if there is no provision in Rule 5 of Cenvat Credit Rules, 2002, to refund the unutilized credit?
(b) Whether under the facts and circumstances of the case the Tribunal is right in ordering for refund even if there is no production and there is no clearance of finished goods?
(c) Whether under the facts and circumstances of the case the Tribunal is right in holding that respondent is entitled for refund even if it goes out of Modvat Scheme or Company is closed?
4. Honble Karnataka High Court in para 5 of its judgement has held as under:-
There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacture 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 ruled 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.
5. Heard the parties and considered the submissions.
6. In the case of Steel Strips, larger bench of this Tribunal although reference made to the decision of Slovak India Trading Co.Pvt.Ltd (Supra) but have not discussed the said decision. That decision is not applicable to the facts of case of Slovak India Trading Co.Pvt.Ltd. Further, I find that the decision of Honble Karnataka High Court shall prevail over the decision of the Tribunal. In these circumstances, following the decision of Honble Karnataka High Court in Slovak India Trading Co.Pvt.Ltd (supra), I hold that the respondent is entitled to get refund lying unutilized in their cenvat credit account on the closure of their factory. Therefore, I do not find any infirmity in the order of the Commissioner (Appeals).
7. The appeal filed by the Revenue is rejected.
(pronounced in the open court) (Ashok Jindal) Member (Judicial) mk 1