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Leo Oils & Lubricants Versus Commissioner of Central Excise, Chennai

2016 (6) TMI 314 - CESTAT CHENNAI

Eligibility for cash refunds of untilized credit - credit could not be unutilized 16 years back due to dispute with the department - appellant is now an SSI unit and their clearance are very much within the limits prescribed under the SSI. - credit under transitional provisions - Rule 57H of erstwhile CER 1944 - Held that:- it is very clear that the appellants were prevented from taking of credit due to the objections from the department and the contention of the appellant that had the departmen .....

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)] which has been upheld by the Supreme Court in UOI Vs Slovak India Trading Co. Pvt. Ltd. [2007 (1) TMI 556 - SUPREME COURT] supports the appellant's contention that they are eligible for cash refund as it was not due to appellant's fault or lapse in availing the credit. Had the department not objected to their availment, their need to have paid the amounts through PLA would have been drastically reduced. The authorities below have lost sight of the fact that cenvat credit is a beneficial legis .....

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ts (appellant) was manufacturing Lubricating Oil falling under Chapter 2710 out of raw materials received from M/s IBP Ltd., who in turn received the same from M/s Indian Oil Corporation. There was a dispute with regard to availment of credit for the period from 2.3.94 to 18.4.94 to the tune of ₹ 2,89,487/- on gate passes issued prior to 1.4.1994. There was also a dispute with regard to availment of credit to the tune of ₹ 8,13,816/-. Further there was denial of credit taken to the t .....

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t of ₹ 56,68,245. Balance amount of ₹ 54,06,249 was ordered to be recovered and the credit allowed as early as on vide Order-in-Original No.13/96 dated 6.2.96 to the tune of ₹ 8,13,816 was ordered to be adjusted against the above demand of ₹ 54,06,249. After further rounds of litigation at various level, the issue on merits viz. availability of MODVAT credit based on the endorsed invoices / gate passes, was decided in favour of the Appellant vide Order-in-Appeal No.47/201 .....

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itled for the entire credit. He however rejected the refund claim of ₹ 11,03,202 as per Rule 57H(7) of the Central Excise Rules, 1944 and read with Rule 11(2) of the Central Excise Rules, 2002. He further held that the said amount of credit is not a refund amount either for payment made in excess or any pre-deposit by the assessee at any point of time. 3. On further appeal, the Commissioner of Central Excise (Appeals) vide Order-in-Appeal No.21/2011 (M-I) dated 19.9.2011 upheld the order o .....

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t of the duty paid on the inputs in the year 1994 due to the objections raised by the Range officials which got settled only during 2010 vide OIA No.47/2010 (M-I) dt. 4.8.2010 in favour of the appellant; that had the department granted refund in 1994 itself there would have been no necessity for the appellant to have made payment by cash in PLA and therefore question of lapsing of credit would not arise; that since the appellant is availing cenvat credit exemption under Notfn 8/2003, they are un .....

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Ranchi Vs Ashok Arc 2006 (193) ELT 399 (Jhar.); that decision of the Hon'ble High Court would prevail the decision of the Tribunal's LB. The appellant had also filed a written synopsis and list of dates of events. 5. Shri L. Paneerselvam, A.C, Ld. A.R appearing on behalf of Revenue reiterated the findings in the OIA and submitted that appeal merits to be dismissed as the decision of the Tribunal's LB is clearly in favour of the Revenue. The Ld. AR requested for filing of written subm .....

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lized towards adjustment on the inventory or would lapse if credit was lying unutilized as per Rule 57H (7) of CER 1944 superseded by introduction of CCR 2004. The appellant's reliance on Hon'ble High Court order in UOI Vs Slovak India Trading Co. Pvt. Ltd. - 2003 (201) ELT 559 (Kar.) does not speak about accumulation of credit due to export under Rule. This order need not be relied upon. In any event, the said decision of Hon'ble High Court was distinguished and the appeal filed by .....

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it is very clear that the appellants were prevented from taking of credit due to the objections from the department and the contention of the appellant that had the department granted refund in the year 1994 itself, the appellant would not have made the payment by cash from the PLA and due to the dispute being not settled for 16 years, the appellant cannot be denied of their benefit to cash refund. The appellant is now an SSI unit and their clearance are very much within the limits prescribed u .....

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r dated 30th April, 2002. The stand of the learned Counsel for the Revenue that the amount should have been adjusted in RG-23A Part-II account cannot be accepted, there being no such RG-23 Part-II account available respect of the finished goods. Similar issue was decided by Andhra Pradesh High Court in the case of Deccan Sales Corporation, reported in 1982 (10) E.L.T. 885, as noticed by the CEGA Tribunal and, in fact, no credit account is being maintained by the respondent on account of raising .....

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e facts were that respondent, M/s.Slovak India Trading Co.Pvt. Ltd. was engaged in the manufacture of shoes and they had surrendered their registration and filed refund application for ₹ 4,15,057/-. The High Court had observed that the admitted facts would reveal of a claim of cash refund and that refund cannot be rejected when the assessee goes out of the modvat scheme or when the company is closed. The argument that there is no provision for refund in terms of Rule 5. The observation of .....

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