TMI Blog2015 (7) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Bombay wherein the High court considering substantial question of law had duly admitted Revenue appeal reported in [2014 (6) TMI 897 - BOMBAY HIGH COURT], therefore, the said decision is not applicable to the facts of the present case. Appellant neither closed their unit nor their registration is cancelled and they are fully viable and functioning and producing Denim fabrics and clearing for domestic as well as for exports and also discharging service tax liabilities. Therefore, I am unable to accept the appellant s contention that refund of pre-deposit and voluntary duty payment should be paid in cash only - pre-deposit amount of ₹ 10 lakhs and ₹ 20,63,023/- voluntarily paid cannot be allowed by way of cash refund and said refund is to be allowed by way of re-credit in cenvat account. - Decided in favour of Revenue. - Appeal Nos. E/498/2009 (By Dept.), E/601/2010 (By Dept.), E/589/2009 (by Assessee) - - - Dated:- 26-6-2015 - Hon ble Shri R. Periasami, Technical Member,J. For the Petitioner : Shri K.P. Muralidharan, AC (AR) For the Respondent : Shri K.S. Venkatagiri, Advocate (AR) ORDER All the three appeals relate to sanction of refund. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough debit in cenvat account towards pre-deposit. He rejected the refund claim balance amount of ₹ 20,60,023/- on the ground that appellant had availed exemption under notification NO.30/2004-CE dt. 9.7.04 and the available credit in their books of account is automatically got lapsed once they opted for exemption under the above notification. Both assessee and Revenue filed appeals before Commissioner (Appeals), the Assessee's appeal against rejection of refund of ₹ 20,60,023/- and the Revenue's appeal against sanction of refund of ₹ 10 lakhs in cash. Commissioner (Appeals) in his OIA No.104/2009 dt. 29.7.2009 rejected the assessee s appeal and vide OIA No.101/09 dt. 29.7.09 rejected Revenue s appeal. Hence both assessee and Revenue s appeal in Appeal No.E/498/2009 and E/589/2009 before Tribunal against two OIAs above respectively. 5. Appeal No.E/601/2009 relates to Revenue s challenge against the sanction of the same amount of pre-deposit of ₹ 10 lakhs. When the adjudicating authority s order dt. 21.11.2008 sanctioning refund of ₹ 10 lakhs was reviewed by the department and filed appeal before Commissioner (Appeals), the adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the exemption under this notification. He also relied Board s circular dt. 8.11.07. He submits that it is a conditional notification and it cannot be said that the goods were exempted absolutely. He further submits that while opting for the exemption under notification 30/04 they have reversed the entire credit on the inputs lying stocks, inputs in process and the credit contained in the finished goods lying in stock. Prior to 1.3.2007 there was no provision in the rule for lapse of any unutilized credit availed on the inputs used in the final products already cleared either on payment of duty or exported. On this issue, he relied on the following citations :- (i) Bazargaon Paper Pulp Pvt. Ltd. 2013 (296) ELT 198 (ii) Venu International - 2014 (312) ELT 859 (G.O.I.) (iii) Inter Globe Services - 2011 (272) ELT 476 (G.O.I) (iv) JAI Corp. Ltd. - 2014 (312) ELT 961 (G.O.I) 8. On the Revenue appeals, he submits that they have rightly debited cenvat credit of ₹ 10 lakhs towards pre-deposit from the balance of unutilized credit available with them as on 9.7.2004. Tribunal also accepted as compliance the pre-deposit made through debit in cenvat account. In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.7.2004 and the balance is NIL and in effect they have not paid any amount. He reiterated para-11 of the OIO and also para 7.3 of OIA No.104/09 dt. 29.7.09. He also submits that appellant s payment by debiting cenvat credit cannot be refunded in cash as there is no provision in CCR to refund the amount in cash except in the case of Rule 5, refund of unutilized credit is allowed by way of cash refund where the unutilised credit is on account of exports. Whereas the appellant filed refund claim amount deposited by way of debiting the unutilized credit. The adjudicating authority instead of allowing the refund of pre-deposit by way of re-credit in cenvat account, he erroneously sanctioned the amount in cash which is against the provisions of law. He submits that the case laws relied upon by appellant related to admissibility of refund in cash where assessee s unit was closed completely whereas appellant s unit is fully functioning and registered with the department and clearing the finished goods for exports as well as for domestic purpose and also discharging service tax. Therefore, he submits appellant s case that appellant s unit is neither closed or defunct where the cenvat cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se or available to the appellant-assessee for payment of duty and pre-deposit to them (ii) whether the consequential refund of pre-deposit sanctioned in cash is valid or not when the said amount was paid through cenvat credit. On perusal of the records, I find that appellants are regularly discharging central excise duty on their finished textile products and availed cenvat credit on the inputs. They opted for exemption under Notification No.30/04 which exempted the goods from the whole of excise duty. Appellants goods are covered under Sl.No.3 of the notification. For easy reference, the notification No.30/2004-CE dt. 9.7.2004 is reproduced as under :- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 7/2003-Central Excise dated the 1st March 2003, published in the Gazette of India vide number G.S.R. 137(E), dated 1st March 2003, the Central Government, being satisfied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 10th day of September, 2004 or by a provider of output service under the Service Tax Credit Rules, 2002, as they existed prior to the 10th day of September, 2004, and remaining unutilized on that day shall be allowed as CENVAT credit to such manufacturer or provider of output service under these rules, and be allowed to be utilized in accordance with these rules. ... (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product is exempted absolutely. Therefore, the sub-rule (3) of Rule 11 is not applicable in appellant s case and the cenvat credit balance lying unutilised on 9.7.2004 i.e. the date of opting for exemption shall not get lapsed and the appellants are eligible to utilize the credit in accordance with CCR. Accordingly, the appellants have rightly utilized the credit for payment of pre-deposit of ₹ 10 lakhs as per the Tribunal s interim order and voluntarily paid ₹ 20,60,023/- through cenvat account towards the demand. 15. Now the second issue for consideration is whether the consequential refund of pre-deposit sanctioned in cash by the original authority is valid or otherwise. The Revenue contended that the said refund cannot be allowed in cash as there is no such provision in CCR or in any other rules. I find that both pre-deposit and the subsequent voluntary payment of the demand was paid through debit in cenvat credit. The appellant s main plea for refund in cash is that as they cannot utilize the credit and they are availing full exemption. They relied Tribunal s decision in the case of Raymond Ltd. Vs CCE (supra) and the Tribunal decision in Century Paper Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g factors for Civil Courts, no fiscal Courts are governed by these concepts, the present reference is bound to be answered in favour of Revenue and it is answered accordingly. The ratio of above Larger Bench decision is squarely applicable to the present case. The Tribunal in the above case has distinguished the Larger Bench decision in the case of Gauri Plasticulture Pvt. Ltd. 2006 (202) ELT 199 (Tri-LB). Therefore, there is merit in the Revenue s appeal against the granting of refund in cash by the original authority. In the present case, the appellant neither closed their unit nor their registration is cancelled and they are fully viable and functioning and producing Denim fabrics and clearing for domestic as well as for exports and also discharging service tax liabilities. Therefore, I am unable to accept the appellant s contention that refund of pre-deposit and voluntary duty payment should be paid in cash only. By respectfully following Tribunal s Larger Bench decision (supra) which is binding on this Tribunal, I hold that pre-deposit amount of ₹ 10 lakhs and ₹ 20,63,023/- voluntarily paid cannot be allowed by way of cash refund and said refund is to be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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