Permissibility of refund of pre-deposit amount in cash when it was paid through Cenvat Credit Account

PJ/Case Laws/2011-12/1504

Case: RAYMOND LTD. v/s COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III

Citation: 2011 (274) E.L.T. 513 (Tri.-Mumbai)

Issue:- Refund of pre-deposit in cash – permissibility of – when pre-deposit paid through Cenvat Credit Account but at the time of passing of order assessee not able to utilize credit.

Brief Facts: - The appellant preferred an appeal against OIO No. 06/KKS/2004-2005 dated 26.8.2004 before Tribunal and Tribunal while considering their stay application directed the appellant vide Order No. S/752, 753/WZB/2004/C-II, dated 14-12- 2004 to make pre-deposit of Rs. 1 Crore from their CENVAT credit account. Accordingly, the appellant reversed the amount of Rs. 1 Crore as directed by this Tribunal on 28-12-2004 and compliance was reported on 3rd January, 2005. This Tribunal, in the appellant's appeal No. E/3090/04 vide Order No. A/13 to 15/2007/C-I/EB, dated 11-12-2006 remanded the matter by setting aside the impugned order. Consequently, the appellant filed a refund claim of pre-deposit on 10th August, 2007 to be paid in cash, as the appellant has opted out MODVAT scheme with effect from 9-7-2004. The adjudicating authority has sanctioned their refund claim but ordered to be utilized through their CENVAT Credit account which was appealed against before the Commissioner (Appeals) who rejected their appeal.

Appellant’s Contention:- Appellant contended that as he has made a pre-deposit as per the direction of this Tribunal's order and the said appeal has been disposed off by this Tribunal by way of remand, they are entitled for the refund of pre-deposit which the adjudicating authority has sanctioned. He further submitted that as he has opted out of Modvat scheme from 9-7-04 and is not able to utilize the refund of pre-deposit through their Cenvat Credit account, therefore, refund has to be sanctioned in cash. To support his contention he placed reliance on the decision of Voltas Ltd. v. Union of India - 1999 (112) E.L.T. 34 (Del.). He also relied on the decision of CCE, Ranchi v. Ashok ARC - 2007 (7) S.T.R. 365 (Jhar.) = 2006 (199) E.L.T. 399 (Jhar.) and Order No. A/63/11/SMB/CR-IV, dated 9-12-2010 in the case of Khator Fibres and Fabrics Ltd.

Respondent’s Contention:- Respondent argued that as the appellant has made the pre-deposit from their Cenvat Credit Account, the refund of pre-deposit is to be made through Cenvat Credit account only. To support his contention he placed reliance on Rollatainers Ltd. v. CCE, Jaipur - 2005 (183) E.L.T. 38 (Tri. - Del.).

Reasoning of Judgment:- The Tribunal held that as per the decision of the Hon'ble Delhi High Court in the case of Voltas Ltd. (supra) the appellant is entitled for refund of pre-deposit amount in case the impugned order is set aside by way of remand. Further they held that the respondent relied on the decision of Rollatainers Ltd. (supra), in that case the claim of the appellant was although they have made pre-deposit from their Cenvat Credit account but refund of pre-deposit was sought in cash. From the facts of above case, it is not clear that the appellant was able to utilize the amount of pre-deposit through their CENVAT credit account or not. Therefore the said case laws cannot relied in the facts of this case as in this case it is very much clear that after 9-7-2004, the appellant has opted out from the Modvat scheme and are not able to utilize the same in CCA. In the case of National Leather Cloth Mfg. Co. v. CCE, Mumbai - 2006 (198) E.L.T. 400 (Tri.-Mum.), this Bench has dismissed the appeal of the appellant considering that the amount is less than Rs. 50,000/-. As, the appeal was dismissed at the admission stage itself, therefore, the case law is not relevant to the facts of this case.

Further in the case of Ashok ARC (supra) wherein the Hon'ble High Court of Jharkhand has categorically held that if no credit account is being maintained by the assessee on account of raising exemption limit, assessee not in a position to utilize the credit, therefore, the Tribunal has rightly held that amount should be refunded in cash. Following the same ratio, as the appellant is not having their CENVAT credit account as they have opted out from Modvat scheme on 9-7-2004, they hold that the appellant is entitled for refund of pre-deposit in cash.

Decision:- Appeal allowed.

Comments

PJ/Case Laws/2011-12/1504

Post a Comment

Query