TMI Blog2018 (4) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... 25th January 2007 passed by the Apex Court in Petition for Special Leave to Appeal (Civil) No. CC 476 of 2007 (Union of India vs Slovak India Trading Company Pvt Ltd) can be read as a declaration of law under Article 141 of the Constitution of India? Matter referred to Larger Bench. - Central Excise Appeal No. 13 of 2007, Central Excise Appeal No. 28 of 2008, Central Excise Appeal No. 257 of 2007 - - - Dated:- 23-4-2018 - A.S. OKA A. K. MENON, JJ Mr. M.H. Patil For appellant in CEXA No.13/2007 and for Respondent in CEXA No. 257/2007 CEXA No.28/2008. Mr. M. Dwivedi and Mr. Sham Walve for Appellant in CEXA No.257/2007 and CEXA No.28/2008 and for the Respondent in CEXA/13/2007. ORDER (PER A.S. OKA, J.): 1. Appeal No.13 of 2007 impugns the Judgment and Order dated 21st August 2006 as well as the Order dated 30th March 2007 of the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (for short Appellate Tribunal ). The appellant was engaged in manufacture of resin PVC Pipes and Fittings. There was a dispute regarding availability of Small Scale Industries (SSI) exemption under the notification dated 28th February 1993. A show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT account on 23rd November, 2000 after cancellation of registration. An Appeal was preferred against the said order by the appellant. In Appeal, the Commissioner of Appeals upheld the Order -in -original on the ground that the appellant was not entitled to cash refund but was entitled to credit in Cenvat Account on 23rd November, 2000 after surrender of the registration certificate. 5. An Appeal was preferred by the appellant before the Appellate Tribunal. The Appellate Tribunal referred the Appeal to a larger Bench. The larger Bench by order dated 21st August, 2006 recorded the following findings : 10. In view of the foregoing discussions, we hold that if denial of credit has compelled as assessee to pay duty out of PLA, the refund of the same would be admissible in cash to the extent of payment of duty in cash during that period. However, if no cash payments duty were made through PLA and the credit would have remained unutilized in the account books, such credit cannot be allowed by way of cash. 11. By applying the above ratio of law as arrived at by this Bench to the fact of the instant case, we find that the debit entry in credit account was made by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows cause notice was confirmed. Being aggrieved by that the respondent preferred an Appeal. The said Appeal was allowed and the Appeal preferred against the said order before the Appellate Tribunal by the appellant revenue was dismissed. 9. As far as Central Excise Appeal No.28 of 2008 is concerned the facts are more or less similar to Appeal No.257 of 2007. 10. Appeal No.13 of 2007 was admitted by this Court on substantial questions of law framed in paragraph 19 which read thus : 1. Whether the Tribunal erred in holding that cash refund of un utilized credit is not permissible, as the Appellants were not compelled to raise debit from PLA. 2. Whether the Appellants, when have stopped production due to closure of factory and surrendered registration certificate on 8.9.2000, the un utilized credit is refundable under Section 11B, in the absence of any express prohibition for such cash refund. 11. Appeal No.257 of 2007 was admitted by order dated 30 th July 2008 on the following substantial question of law : Whether cash refund is permissible in terms of clause (c) to the proviso to section 11B(2) of the Central Excise Act, 1944 where an assessee is una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Slovak India Trading Co. Pvt. Ltd. (supra), and observed that the Appellate Tribunals have consistently held that assessee is entitled to refund in cash of the amount deposited if the assessee has gone out of Modvat Scheme or his unit is closed. He pointed out that there are several decisions of the Appellate Tribunals which consistently take the same view. He submitted that the law is very well settled. The revenue cannot take a stand which is contrary to consistent decisions of the Tribunals which have been accepted by it. The learned counsel appearing for the appellant also pointed out a decision of the larger Bench of the Appellate Tribunal at Delhi in the case of Steel Strips Vs. Commissioner of Central Excise, Ludhiana 2012 (26) S.T.R. 270 (Tri. - LB). He submitted that the said decision will not be of any help to the respondent revenue considering the view taken by the Division Bench of this Court. He pointed out the decision of the Apex Court in the case of Birla Corporation Ltd. Vs. Commissioner of Central Excise 2005 (186) E.L.T. 266 (S.C.) and submitted that the revenue cannot be allowed to take a stand different from the previous cases. He also relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee. (emphasis added) 18. The Union of India preferred Special Leave Petition (C) No.CC476 OF 2007 against the aforesaid decision of the Karnataka High Court which was dismissed by passing the following order: Delay condoned. The Tribunal while allowing the appeal filed by the respondent assessee has relied upon the following decisions : 1. Eicher Tractors v. CCE, Hyderabad, 2002 (147) E.L.T. 457 (Tri Del); 2. Shree Prakash Textiles (Guj.) Ltd. v. CCE, Ahmedabad, 2004 (169) E.L.T. 162 (Tri. Mumbai); 3. CCE, Ahmedabad v. Babu Textile Industries, 2003 (158) E.L.T. 215 (Tri. Mumbai); and 4. CCE, Ahmedabad v. Arcoy Industries, 2004 (170) E.L.T. 507 (Tri. Mumbai). of the Tribunal in which it has been held that the assessee is ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Leave Petition had been dismissed by a reasoned order [ 2008 (223) E.L.T. A 170 (S.C.)]. In the said order, the statement of the Learned Additional Solicitor General was recorded by the Apex Court, who had conceded before the Apex Court that the various judgments relied upon by the Karnataka High Court were not appealed against by the Revenue. Notwithstanding this concession, it is not possible to say that the S.L.P was dismissed in view of the concession given by the Additional Solicitor General. No concession was given with regard to the correctness of the judgment of Karnataka High Court. This judgment was confirmed by the Apex Court on its own merits for the reasons stated therein. The Tribunal was wrong in observing that the S.L.P was dismissed because the Learned Additional Solicitor General had conceded the correctness of the High Court's judgment. What was conceded by the Learned Additional Solicitor General was that the various judgments relied upon by the Court were not appealed against and not the correctness of the judgment of Karnataka High Court. The Apex Court in Birla Corporation Ltd. v. Commissioner of Central Excise 2015 (186) E.L.T. 266 (S.C.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial 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 is the only order binding as res judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the impugned order in exercise of our discretion under Article 226 of the Constitution. The Special Leave Petition is, accordingly, dismissed leaving the question of law open. (emphasis added) 25. Thus, the question of law which arose before the Division Bench has been specifically kept open by the Apex Court and therefore, by virtue of dismissal of Special Leave Petition, the legal issues which arose before the Division Bench were not concluded. 26. Therefore, going by the law laid down in the case of Kunhayammed and Ors., in our opinion, the SLP filed by the Union of India against the decision of the Karnataka High Court in the case of Slovak India Trading Company was not dismissed by recording reasons on merits. With greatest respect to the Division Bench, prima facie, in our view, the SLP was dismissed only on the basis of a concession made by the learned Additional Solicitor General. Prima facie, in our view, clause (iv) of paragraph 44 of the decision of Kunhayammed and Ors. will apply. There is one more aspect of the matter. While dismissing the SLP preferred against the decision of the Division Bench of this Court, the Apex Court has expressly observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure for adjustment of duty liability against Modvat Account. That is required to be carried out in accordance with law and unadjusted amount is not expressly permitted to be refunded. In absence of express provision to grant refund, that is difficult to entertain except in the case of export. There cannot be presumption that in the absence of debarment to make refund in other cases that is permissible. Refund results in outflow from treasury, which needs sanction of law and an order of refund for such purpose is sine qua non. Law has only recognized the event of export of goods for refund of Modvat credit as has been rightly pleaded by Revenue and present reference is neither the case of otherwise due of the refund nor the case of exported goods. Similarly absence of express grant in statute does not imply ipso facto entitlement to refund. So also absence of express grant is an implied bar for refund. When right to refund does not accrue under law, claim thereof is inconceivable. Therefore, present reference is to be answered negatively and in favour of Revenue since refund of unutilized credit is only permissible in case of export of goods and for no other reason whatsoever t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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