2018 (7) TMI 908 – CESTAT NEW DELHI – TMI – Refund of accumulated CENVAT Credit – closure of production due to fire accident – Rule 5 of the Cenvat Credit Rules, 2004 – section 11B of Central Excise Act, 1944 – Held that:- The combined reading of both these provisions makes it clear that the refund of Cenvat Credits on inputs is admissible where such inputs have been used in the final product for export – But the fact of the present case is that the Appellant unit had stopped the manufacturing activity due to a fire accident in their premises and the refund has also been claimed solely on the said basis of the balance lying unutilized in their Cenvat Credit account. Thus, admittedly and apparently, appellant's case is not covered by the above said provisions.
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In the present case, admittedly, there is no manufacture subject to the closure of the company. Hence, the refund in furtherance of Rule 5 is not available.
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Since there is no provision under Cenvat Credit Rules, 200
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Central Excise Tariffs Act, 1985 since the year 2005 and has, accordingly, been registered. The duty paid raw material, mainly Acrylonitrile/input used be procured by the Appellant which was chargeable to duty at the rate of 16%. However, the finished goods were chargeable to the duty at the rate of 8%. In the year 2007, due to a fire accident in the Appellant's factory, their manufacturing activities stopped. Due to the aforesaid variation in the duty ranged, huge amount of unutilized Cenvat Credit remained in the books of account. Accordingly, the Appellant had requested for refund of the said unutilized Cenvat Credit in cash and the demand was rejected by both the adjudicating authorities. 2. We have heard both the parties. The learned Counsel for the Appellant, while relying upon the Union of India vs. M/s Slovak India Trading Co. Pvt. Ltd., 2006 (201) E.L.T. 559 (Kar.) has impressed upon that the assessee must be given refund on unutilized Cenvat Credit if he has stopped manu
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r 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. 4. Also is relevant the Provision 11B of Central Excise Act, 1944 which provides for claim for refund of duty 5. The combined reading of both these provisions makes it clear that the refund of Cenvat Credits on inputs is admissible where
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-LB, both decided by a common order dated 15.05.2011 of this Tribunal, wherein the adjudication of the Hon'ble High Court in Raipur vs. M/s Heera Cement 2006-TIOL-08-SC-CESTAT was relied upon to hold that non-filing of appeal by revenue (as it was in Slovac India Trading Co. Pvt. Ltd. case) is not a bar for scrutiny in another case. It was also held as follows: "A distinction between provisions of statute which are of substantive character and are built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in their nature, on the other, must be kept clearly distinguished. An eligibility criteria to get refund calls for a strict construction, although construction of a condition thereof may be given a liberal meaning of the same is directory in nature. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does al/ that can be reasonably
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