TMI Blog2023 (2) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... T. LTD. [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT] where it was held that There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case on hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly ruled by the Tribunal. Accordingly the appellant is entitled for cash refund of accumulated and unutilized Cenvat credit of Education Cess and Secondary and Higher Education Cess - appeal allowed. - EXCISE Appeal No. 10345 of 2021-SM - FINAL ORDER NO. A/10198/2023 - Dated:- 6-2-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) Shri H.D. Dave, Advocate for the Appellant Shri Vijay G Iyengar, Assistant Commissioner (AR) for the Revenue. ORDER The issue involved in the present case is whether the appellant is entitled for cash refund against the accumulated and unutilized Cenvat credit of Education Cess and Secondary and Higher Education Cess. 2. Shri H.D. Dave, learned Counsel appearing on behalf of the appellant submits that the Revenue has denied refund on two counts, first, the Cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of - (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; (ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act; (iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act,1978 ( 40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ( 58 of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); (vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No.2) Act, 2004 (23 of 2004); (via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007); (vii) the additional duty leviable under section 3 of the Customs Tariff A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty. 5. There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case on hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly ruled by the Tribunal. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of the Cenvet credit in favour of the assessee, assessee was entitled for the refund of Rs. 63,001/- from the Revenue which is not in dispute. It is also a fact that manufacturing unit of assessee had been closed and the concern of the assessee is not in production any more. Therefore, in view of Rule 5 which is reproduced as under :- Rule 5. Refund of CENVAT credit . - Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the Cenvat credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of the Union of India (UOI) represented by the Commissioner of Central Excise v. Slovak India Trading Company Private Limited has held as under :- 4. Admitted facts would reveal of a claim of cash refund and admitted facts would reveal of rejection at the hands of the Assistant Commissioner and also the appellate authority. The Tribunal has chosen to allow the claim application on the ground that refund cannot be rejected when the assessee goes out of Modvat scheme or when the Company is closed. The argument is that there is no provision for refund in terms of Rule 5 of Cenvat Credit Rules, 2002. Rule 5 reads as under? Rule 5. Refund of CENVAT Credit. - When any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding with the matter, it will not be out of place to reproduce Rule 5 of the Central Excise Act which reads as under : Rule 5. Refund of CENVAT credit. - Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification : Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty. 11 . In our considered opinion, in view of the observations made by the Karnataka High Court in Slovak India Trading Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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