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Ashutosh Metal Industries V/S C.E.G.S.T., Delhi-I

    Excise Appeal No. E/51658/2017 [SM] (Arising out of Order-in-Appeal No. 230/CE/DLH/2017 dated 26.09.2017 passed by the Commissioner (Appeals-I), CGST, New Delhi) and Final Order No. 51634/2018

    Decided On, 26 April 2018

    At, Customs Excise Service Tax Appellate Tribunal New Delhi

    By, THE HONORABLE JUSTICE: S.K. MOHANTY
    By, MEMBER

    For Petitioner: V.S. Negi, Advocate And For Respondents: U. Sengraj, D.R.



Judgment Text


1. Brief facts of the case are that the appellant was engaged in the manufacture and clearance of copper ingots and rods, falling under Chapter 74 of the First Schedule to the Central Excise Act, 1985. During the period 2005-06, the Department investigated the matter of clandestine removal of goods and initiated show cause proceedings against the appellant for confirmation of the duty demand. The matter was adjudicated vide order dated 30.03.2009, wherein the Commissioner of Central Excise, New Delhi has confirmed Central Excise Duty amount of Rs. 8,30,53,761/- with equal amount of penalty. Against the said adjudication order, the appellant had filed appeal along with stay petition before this Tribunal. The stay petition came up for hearing before the Tribunal on 08.04.2011, wherein the appellant was directed to make pre-deposit of Rs. 6.00 crores within a period of 12 weeks and report compliance on 08.08.2011. Thereafter, the appellant has filed the Misc. Application seeking for rectification/modification of the stay order dated 08.04.2011, which was dismissed by the Tribunal. Subsequently, the appellant filed the appeal before the Hon'ble Delhi High Court and the Hon'ble Court were pleased to modify the order of the Tribunal in reducing the pre-deposit amount from Rs. 6.00 crores to Rs. 1.5 crores. Such amount as directed by the Hon'ble Delhi High Court was deposited by the appellant through cash as well as by utilising the Cenvat Credit account. On compliance of the stay order, the appeal was taken up for hearing by the Tribunal, which was disposed of by Final order No. 50477/2017-EX-DB dated 25.01.2017 in favour of the appellant. In response to the favourable order of the Tribunal, the appellant had filed the refund application before the Jurisdictional Central Excise Authorities on 13.02.2017. Refund application was adjudicated on 11.05.2017, wherein the refund claim was sanctioned and the amount paid in cash was refunded to the appellant and the balance amount of Rs. 10.00 Lakhs deposited through Cenvat Account was restored to the Cenvat Account only. Against restoration of the amount into the Cenvat account, as ordered by the original authority, the appellant had filed appeal before the Commissioner (Appeals), which was disposed of by the impugned order dated 26.09.2017 in rejecting the appeal of the appellant. The Ld. Commissioner (Appeals) has held that since Rs. 10.00 Lakhs was debited through the Cenvat Account, refund of such amount should be restored to the Cenvat Account only.

2. Feeling aggrieved with the impugned order, the appellant has preferred this appeal mainly on the ground that the factory of the appellant has already been closed and if the refund amount is restored to the Cenvat Account, the same will not solve any purpose, inasmuch as, the appellant will not be in a position to utilize such credit for the purpose of payment of Central Excise duty. Thus, the appellant prayed for refunding such amount in cash. To support the grounds of appeal, the Ld. Advocate has relied on the decisions of this Tribunal in the case of Raymond Ltd. - 2011 (274) ELT 513 (Tri. Mum.), Birla Textile Mills : 2015 (325) ELT 651 (Del.), S.K. Sacks Pvt. Ltd : 2010 (261) ELT 560 (Tri.-Del.), Lohia Polyester Pvt. Ltd : 2014 (313) ELT 435 (Tri-Ahmd), Jai Ganpati Metals : 2015 (322) ELT 730 (Tri.-Del.), Bangalore Cables Pvt. Ltd : 2017 (347) ELT 100 (Tri.-Bang.) & Shalu Synthetics Pvt. Ltd : 2017 (346) ELT 413 (Tri-Ahmd.).

3. On the other hand, the Ld. D.R. appearing for the Revenue reiterated the findings recorded in the impugned order.

4. Heard both sides and perused the case records.

5. The facts are not under dispute that the appellant was entitled to avail the Cenvat credit of Central Excise duty paid on the inputs/capital goods for utilisation of the same as per the provisions contained in the Cenvat statute. At the time of making payment of the pre-deposit amount, as per the directions of the Hon'ble Delhi High Court, the appellant's factory was in operation. Since, the appeal pending before the Tribunal was allowed in favour of the appellant, the amount pre-deposited by it should be refunded by the Department and the Department has also rightly refunded the amount. But restoring the amount to the Cenvat account of the appellant will not solve any purpose, inasmuch as, there is no scope for the appellant to utilise such credit for payment of the Central Excise duty on clearance of the final product, in view of the fact that the factory is not in operation. Since, the appellant had lawfully earned the Cenvat credit and due to closure of the factory, is not in a position to utilise the same now, such pre-deposited amount, in my considered view, should be refunded to it i

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n cash. I find that the decisions relied upon by the Ld. Advocate are squarely applicable in support of cash refund, as claimed by the appellant. It has been held that in case of closure of factory, the assessee should be allowed for cash refund of the un-utilised credit balance available in the books of account. 6. In view of above, I do not find any merits in the impugned order. Accordingly, after setting aside the same, I allow the appeal, holding that the appellant should be eligible for refund in cash.
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