Cce, Meerut I vs M/S Tirupati Lpg Industries Ltd

(Arising out of the Order-in-Appeal No. 16-CE/MRT-I/2006 dated 28/02/06 passed by the Commissioner (Appeals), Central Excise, Meerut  I).

For approval and signature:

Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

CCE, Meerut  I . Appellant

vs.

M/s Tirupati LPG Industries Ltd. . Respondent

and vice-versa

Appearance:

Shri R.K. Gupta, A.R.  for the appellant/respondent.

Shri Sahil Mullick, Advocate  for the Respondent/appellant.

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

Final Order No. 52186-52187/2015 dated 07/07/2015

Per. H.K. Thakur :-

Appeal No. E/1504/2006  EX (DB) has been filed by the Revenue against OIA No. 16-CE/MRT-I/2006 dated 28/02/06. Appeal No. E/3689/2006  EX (DB) has been filed by the appellant M/s Tirupati LPG Industries Ltd. against OIA No. 114-CE/MRT-I/2006 dated 31/07/06.

2. Shri Sahil Mullick (Advocate) appearing on behalf of the appellant M/s Tirupati LPG Industries Ltd. argued that a refund claim of Rs. 8,96,911/- was filed by the appellant which was pertaining to the Cenvat credit on inputs contained in Work-in-Progress/finished goods or lying as such at the time of availing exemption under Notification No. 50/2003-CE dated 10/06/03. That this amount was got reversed/paid by the Department which was correctly admissible to the appellant. That under OIO No. 40/05 (Ref. 71/04) dated 06/5/05 the reversal of Cenvat credit of Rs. 8,96,911/- done by the appellant on 23/09/2004 was allowed as re-credit in their RG-23A Pt. II account. That both Revenue and the appellant filed appeal against the said OIO dated 06/05/05. That appeal filed by the appellant for cash refund was allowed by Commissioner (Appeals) under OIA No. 16-CE/MRT-I/2006 dated 28/02/2006 allowed payment of refund in cash against which Revenue has filed appeal. That under OIA No. 114-CE/MRT-I/2006 dated 31/07/2006 Commissioner (Appeals) allowed appeal No. 143-CE/APPL/MRT-I/2006 filed by the Revenue with respect to same OIO No. 40/05 (Ref. 71/04) dated 06/05/2005 against which appellants appeal was also allowed under OIA No. 16-CE/MRT-I/2006 dated 28/2/2006. Learned Advocate relied upon the following case laws where Uttarakhand High Court has held that where assessee is not able to utilise the admissible credit then refund can be sanctioned in cash :- (i) order dated 18/10/2011 passed in the case of CC & CE, Meerut  I vs. M/s Janardhan Plyboard Industries Ltd. in CEA No. 10/2009 (ii) order dated 25/3/2014 in the case of The Rishabh Velveleen Ltd. vs. CE&ST in CEA No. 09/2009 (iii) Albert David Ltd. vs. CCE, Meerut reported in 2003 (151) E.L.T. 443 (Tri.  Del.).

3. Shri R.K. Gupta (AR) pleading on behalf of the Revenue argued that under Cenvat Credit Rules, there is no provision for sanctioning of cash refund, therefore, order passed by the First Appellate Authority sanctioning refund of Cenvat credit in cash is not proper.

4. Heard both sides and perused the case records. Issue involved in the present proceedings is whether appellant M/s Tirupati LPG Industries Ltd. is entitled to cash refund of Cenvat credit lying in their RG-23A Pt. II. In this regard the appellant interalia, has relied upon the case law of CC & CE, Meerut  I vs. Janardhan Plyboard Industries Ltd. (supra) under which following observations have been made by Jurisdictional High Court of Uttarakhand on page  10 and 11 of the judgment :-

The learned counsel for the appellant submitted that in Central Excise Appeal No. 4 of 2008, the Commissioner (Appeals) had directed the refund of the credit in cash. The learned counsel submitted that the assessee availed the benefit in credit and the same could not be refunded in cash.

Upon hearing the learned counsel, the Court finds that the adjudicating authority had sanctioned the refund claimed by way of credit in their RG-23A Pt. II account. The Court finds that the assessee is availing exemption and is not in a position to utilise the credit and if the assessee is not able to utilise the credit, the very basis of the refund is defeated. Consequently, the Commissioner (Appeals) was justified in giving the assessee the cash refund of the credit. In Commissioner of Central Excise vs. Ashok Arc, 2006 (193) E.L.T. 399, the High Court of Jharkhand held that the assessee is entitled for the refund in cash. In view of the aforesaid, the submission of the learned counsel for the appellant cannot be accepted.

In the light of the aforesaid, we are of the opinion that Cenvat credit which was validly availed at the time of the receipt of the inputs for the manufacture of the final product, on which excise duty was payable, but subsequently utilised for the manufacture of the same final product which became exempted from payment of excise duty pursuant to a subsequent notification, was not liable to be reversed under Rule 6 (1) of the Cenvat Credit Rules, 2002. the question of law is answered accordingly.

5. In view of the above case law laid down by the Jurisdictional High Court, it has to be held that credit taken by the appellant was not required to be reversed when the final products became exempted and that cash refund of the same is admissible to the appellant. Accordingly, appeal filed by the Revenue is dismissed and appeal filed by the appellant is allowed with consequential relief.

(Operative part of the order pronounced in the open court.)

andl

(Justice G. Raghuram)

President

(H.K. Thakur)

Technical Member

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