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M/s. MM Forgings Limited Versus The Customs, Excise and Service Tax Appellate Tribunal, The Commissioner of Central Excise & Service Tax

2017 (7) TMI 23 - MADRAS HIGH COURT

Refund of unutilized CENVAT credit - Held that: - The Assessee is entitled to claim refund of unutilised credit in terms of Rule 5 of 2002 Rules read with 2002 notification against the amount standing to its credit in the CENVAT credit account. There is nothing either in the Rule i.e., Rule 5 of the 2002 Rules or the 2002 notification, which provides for safe guards, conditions and the limitations which would have us conclude that the Revenue could have made the aforementioned adjustments agains .....

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see is aggrieved by the fact that while it had claimed the refund of unutilized CENVAT credit, amounting to ₹ 40,26,692/-, the authorities below sanctioned the refund, only to the extent of ₹ 39,19,239/-. Thus, in effect, the authorities below excised the refund claim to the extent of ₹ 77,453/-. 3. To be noted, the Assessee has claimed the refund, in terms of Rule 5 of the CENVAT Credit Rules, 2002 (in short, 'the 2002 Rules') read with Notification No. 11/2002-Central .....

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of the show cause notice dated 28.9.2004, (in short, 'SCN') issued to the Assessee. In paragraph 4 of the SCN, the Revenue has set forth the calculations, inter alia, pertaining to the amount of unutilized credit lying in the assessee's CENVAT credit account. Pertinently, these calculations also form part of paragraph 4 of the impugned Judgment, passed by the Tribunal. 3.1. For the sake of convenience, the said calculations are extracted hereafter: 1) Opening balance of credit as on .....

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4/kg.) Rs.96,91,670/- (b) Credit involved on inputs contained in Finished goods NIL (c) Credit involved on inputs contained in Finished goods (63756 x ₹ 3.54) ₹ 2,25,696/- Sub Total 6 (a+b+c) Rs.99,17,366/- 7) Credit remaining unutilized Rs.39,49,239/- 8) Refund claimed Rs.40,26,692/- 4. The Assessee claims that the CENVAT credit available in its account as on 31.12.2003, which is the date in which the quarter in issue ends, is a sum of ₹ 1,38,66,605/-. 4.1. As against this, th .....

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g in stock as on 31.12.2003, and the input credit, which is relatable to finished goods available on the same date, i.e., 31.12.2003. Thus, the Revenue has adjusted two sums i.e., ₹ 96,91,670/- and ₹ 2,25,696/- against the closing balance in the CENVAT credit, available as on 31.12.2003 i.e., against the sum of ₹ 1,38,66,605/-. It is on account of this adjustment that the Revenue has reached the conclusion that the unutilised credit available in the Assessee's CENVAT credit .....

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smissed the Assessee's appeal vide order 17.12.2004 and as alluded to above, the Tribunal dismissed the second appeal as well, on 21.1.2015. 6. Mr.Murugappan, who appears on behalf of the Assessee, says that the Revenue is not entitled to adjust the input credit, which is attributable to raw material and/or finished goods lying in stock, as the methodology so employed is beyond the scope of Rule 5 of 2002 Rules and the 2002 notification. 7. On the other hand, Mr.Srinivas, the learned counsel .....

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