No refund of outstanding CENVAT credit after closure of factory

[CA Bimal Jain]

The CESTAT, Chennai in M/S. ALFRED BERG & CO., (I) PVT. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI - 2023 (8) TMI 243 - CESTAT CHENNAI held that no refund of unutilized CENVAT credit after stopping manufacturing due to sale of business to another company.

Facts:

M/s. Alfred Berg & Co., (I) Pvt. Ltd. (“the Appellant”) was a manufacturer who had stopped their manufacturing activities and sold the assets to another company. The Appellant then filed a refund claim of the accumulated balance of CENVAT credit (“the Credit”).

A show cause notice proposing denial of the refund claim was issued to the Appellant. Subsequently, the adjudicating authority passed an order (“the Impugned Order”) rejecting the refund claim.

Aggrieved by the Impugned Order, the Appellant filed an appeal before the CESTAT, Chennai.

Issue:

Whether the Appellant is eligible for a refund of the credit outstanding in their CENVAT account at the time of closing of factory?

Held:

The CESTAT, Chennai in M/S. ALFRED BERG & CO., (I) PVT. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI - 2023 (8) TMI 243 - CESTAT CHENNAI held as under: -

• Noted that, the facts of the present case are similar as in M/S. GAURI PLASTICULTURE P. LTD., BOMBAY DYEING & MANUFACTURING CO. LTD., M/S. SIMPLEX MILLS CO. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, INDORE, THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV, THE UNION OF INDIA THROUGH THE COMMISSIONER OF CENTRAL EXCISE MUMBAI I - 2019 (6) TMI 820 - BOMBAY HIGH COURT wherein the Hon’ble Bombay High Court denied the refund of CENVAT credit to the assessee after closure of factory.
• Held that, the Appellant is not eligible for a refund of the credit outstanding in their CENVAT account at the time of closure of his factory.

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