CENTURY RAYON - TWISTING UNIT Vs. COMMISSIONER OF C. EX.
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Century Rayon - Twisting Unit
COMMISSIONER OF C. EX.
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S.S.GARG,MEMBER (J) -
(1.)This appeal is directed against Order -in -Appeal No. SB/61/TH -I/2010, dated 28 -4 -2010 vide which the ld. Commissioner rejected the appeal of the appellant. Briefly, the facts of the case are that the appellant was engaged in the manufacture of excisable goods i.e. twisting of viscose filament yarn falling under Chapter Heading 54 of CETA, 1985 and were availing Cenvat credit for the duties paid on various capital goods and input services used in or in relation to the manufacturing process. The appellant after carrying out business for a period of 2 years closed down the operation as he found the business of twisting yarn was not commercially viable and accordingly surrendered their excise registration certificate vide letter dated 15 -5 -2007 addressed to the Asst. Commissioner of Central Excise, Kalyan. Thereafter, the appellant filed a refund application claiming refund of unutilised Cenvat credit of Rs. 85974/ -. The Asst. Commissioner had rejected the refund of the appellant vide order dated 19 -10 -2007 on the ground that in terms of Rule 11(2) of Cenvat Credit Rules, 2004, unutilised credit would lapse on closure of the unit. The appellant filed appeal before the Commissioner (Appeals), which was dismissed by order dated 28 -4 -2010. Aggrieved by the same, appellant is before this Tribunal in this present appeal.
(2.)Ld. counsel for the appellant submitted that the impugned order passed by the Commissioner (Appeals) is not sustainable in law as the same has been passed by misinterpreting the relevant provisions of law. He further submitted that in Para 9 of the impugned order the respondent agreed in principle that the appellant is entitled to get the refund but still rejected the same on the ground of non -submission of required documentary evidence. He further submitted that the appellant has filed the copy of ER return along with application for refund which clearly shows unutilised balance of Cenvat credit during the relevant period. In support of their claim of refund, the appellant has relied upon the decision of the Karnataka High Court in Slovak India Trading Co. P. Ltd. reported in : 2008 (10) STR 101 (Kar.) : 2006 (201) E.L.T. 559 (Kar.) wherein it has been held by the Hon'ble High Court as under: - -
"Refund - Cenvat/Modvat - Unutilised credit - Assessee stopped production due to closure of factory and came out of Cenvat scheme - Rule 5 of Cenvat Credit Rules, 2002 does not expressly prohibit refund of unutilised credit where there was no manufacture in the light of closure of factory -Moreover, since assessee has come out of Cenvat scheme, refund of unutilised credit has to be made - Sec. 11B of Central Excise Act, 1944 - Rule 5 ibid, [para 5]"
This decision was upheld by the Apex Court by dismissing the SLP of the department as reported in, 2008 (223) E.L.T. A170 (S.C.).
(3.)The appellant also relied upon CCE Tirupati v/s. Kores (India) Ltd. [ : 2009 (245) E.L.T. 411 (Tri. -Bang.) : 2011 (22) S.T.R. 361 (Tribunal)] wherein it has been held as under:
"Refund of Cenvat/Modvat - Unutilised credit lying with assessee on account of closure of factory - Well settled law that amount of credit lying unutilised on account of closure of factory should be refunded - Rule 5 of Cenvat Credit Rules, 2004. [para 8]"
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