TMI Blog2014 (10) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted it would mean that the reference to conditions and limitations in Rule 5 is to no effect and such conditions specified in Rule 5 read with Notification 5/2006 are superfluous. Rule 5 clearly states that refund shall be allowed subject to such conditions as may be specified. In the present case the conditions are not fulfilled. Therefore, refund in such cases of closure of factory is not provided under the statute. - Decided against the assessee. If the order refusing leave to appeal is a speaking order, i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is not possible, the manufacturer or the provider of output service shall be allowed refund of such-amount ........... It was held by the adjudicating authority that Rule 5 does not provide any legal basis to grant cash refund of unutilized credit on account of closure of factory except in cases where the same is attributable to inputs which have gone into final products which are exported. Therefore, the refund was rejected. 4. Heard both sides. 5. In the statement of facts, in the appeal filed by appellants before us, the reason for accumulation of CENVAT Credit at the time of closure of factory is stated in para 6 as reproduced here-in-under:- 6. The main raw material for the Company was aluminium ingot, zinc ingot, and aluminium scrap. The Company was purchasing the aluminium ingot from National Aluminium Company Ltd. and Hindalco Industries Ltd. The Company was purchasing the zinc ingot from Hindustan Zinc Ltd. The prices of aluminium ingot and zinc ingot vary considerably and are based on the prices ruling at London Metal Exchange (LME). The domestic prices are also affected by the Foreign Currency Rates. As per the policy of National Aluminium Company Ltd, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in the case of Birla Corporation vs. CCE -2011 (274) ELT 529 (Tri.Mum). 7. We have carefully considered the submissions made by both sides. We find that the issue is regarding the correct interpretation of Rule 5 of Cenvat Credit Rules, 2004. Rule 5 read as - Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty. The scheme o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -that is, the duty paid on inputs is being refunded without their use in the manufacture of final products. This will amount to refund of Central Excise duty paid which has no basis in law. 7.2 The appellant have argued that there is no express provision in terms of Rule 5 which bars refund on closure of factory. We find that Rule 5 expressly allows refund only when adjustment is not possible to utilize CENVAT Credit for clearing goods for home consumption or for export on payment of duty. There cannot be any other reasonable interpretation in the manner of reading this Rule. The Rule starts with the phrase where any inputs are used in the final products which are cleared for export..... Thus the first condition is that the final products must be exported. The general principle of construction in canons of law is that a legislative instrument has to be read as a whole. The phrases in a sentence have to be read in their cognate sense. That is, Rule 5 has to be read as a whole and not in parts. The whole conveys only one sense i.e. refund of unutilized credit is only permissible in case of export of goods and not for any other reason. 7.3 The other important part of Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being a defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disentitling him to any indulgence by the Court, (iv) the conduct of the petitioner having no disentitling him to any indulgence by the Court, (iv) the question raised by the petitioner for consideration by this Court being not fit for consideration or deserving being dealt with by the Apex Court of the country and so on. The expression often employed by this Court while disposing of such petitions are - heard and dismissed , dismissed , dismissed as barred by time and so on. May be that at the admission stage itself the opposite party appears on caveat or on notice and offers contest to the maintainability of the petition. The Court may apply its mind to the merit-worthiness of the petitioner's prayer seeking leave to file an appeal and having formed an opinion may say dismissed on merits . Such an order may be passed even ex-parte, that is, in the absence of the opposite party. In any case, the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract the applicability of doctrine of merger. It would not make a difference whether the order is one of reversal or of modification or of dismissal affirming the order appealed against. It would also not make any difference if the order is a speaking or non-speaking one. Whenever this Court has felt inclined to apply its mind to the merits of the order put in issue before it though it may be inclined to affirm the same, it is customary with this Court to grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave) though at times the orders granting leave to appeal and dismissing the appeal are contained in the a same order and at times the orders are quite brief. Nevertheless, the order shows the exercise of appellate jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this Court. 42. To merge means to sink or disappear in something else; to become absorbed or extinguished; to be combined or be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order, i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties. (vi) Onc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45/2010 decided on 28.6.2010). 7.6 We have also read the pronouncement of Hon'ble Supreme Court in the case of M/s Jain Vanguard Polybutlene Ltd. in SLP 10805/2011 dated 12.07.2011. It reads We find no reason to interfere in the impugned order in exercise of our jurisdiction under Act 136 of the Constitution. The Special Petition is accordingly, dismissed leaving the question of law open. Thus the judicial orders on the issue have not attained finality. 7.7 In Hariprasad Shivshankar Shukla vs. A D Divikar - 2002-TIOL-447-SC-MISC-CB case the Hon'ble Supreme Court considered the use of the phrase for any reason whatsoever, occurring in Section 25 of the Industrial Disputes Act, 1947. The issue being considered was whether retrenchment compensation would have to be given on the termination of workman arising from the closure of the business. The Hon'ble Apex Court considered the definitions of retrenchment and the provisions of Section 25F ibid and came to the conclusion that compensation may not be granted in situation of bonafide closure of the business. It held that - In the absence of any compelling words to indicate that the intention was even to incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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