COMMISSIONER OF C. EX. & S.T, LUCKNOW Vs. JAI GANPATI METALS
LAWS(CE)-2015-3-53
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 04,2015

Commissioner Of C. Ex. And S.T, Lucknow Appellant
VERSUS
Jai Ganpati Metals Respondents


Referred Judgements :-

STEEL STRIPS V. C.C.E.,LUDHIANA [REFERRED TO]


JUDGEMENT

- (1.)Ashok Jindal, Member (J)
(2.)THE Revenue is in appeal against the impugned order wherein the Commissioner (Appeals) has allowed the cash refund of unutilized credit lying in Cenvat account on closure of their factory under Rule 5 of Cenvat Credit Rules, 2004 read with Section 11B of Central Excise Act, 1944. Ld. AR has relied on the Larger Bench decision of the Tribunal in the case of Steel Strips v. C.C.E., Ludhiana - , 2011 (269) E.L.T. 257 (Tri. -LB) :, 2012 (26) S.T.R. 270 (Tribunal - LB), this Tribunal has held that there is no provision under Rule 5 of Cenvat Credit Rules, 2004 to allow refund lying unutilized in Cenvat account on closure of the factory.
On the other hand, learned Consultant for the respondent relied on the decision of Hon'ble Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd. - : 2006 (201) E.L.T. 559 (Kar.) : 2008 (10) S.T.R. 101 (Kar.) wherein Hon'ble Karnataka High Court has framed the following three issues: -

(a) Whether under the facts and circumstances of the case the Tribunal is right in ordering for refund even if there is no provision in Rule 5 of Cenvat Credit Rules, 2002, to refund the unutilized credit?

(b) Whether under the facts and circumstances of the case the Tribunal is right in ordering for refund even if there is no production and there is no clearance of finished goods?

(c) Whether under the facts and circumstances of the case the Tribunal is right in holding that respondent is entitled for refund even if it goes out of Modvat Scheme or Company is closed?

(3.)HON 'ble Karnataka High Court in para 5 of its judgment has held as under: -
There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacture 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 these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee.

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