Whether Cenvat Credit be availed of the unit which is now closed ?

PJ/CASE LAW/2015-16/2989

Case:- COMMISSIONER OF C. EX., RAIGAD Versus DUJODWALA PRODUCTS LTD.

Citation:- 2015 (326) E.L.T. 281 (Bom.)

Brief facts:-The relevant facts of the case are that the revenue challenges the order dated 26 July, 2011 of the Settlement Commissioner. The issue covered in that said case is that the respondent claims the cenvat credit of its closed down unit and department filed a writ petition by submitting that It amounts to non-compliance of Rule 10 of Cenvat Credit Rules.

Appellant’s contention: -Mr. Mishra, appearing on behalf of Appellant (Revenue) submits that the opinion of the third member, who is in minority, would reveal that the respondent has contravened the Cenvat Credit Rules, 2004. He further submits that the present respondent had claimed Cenvat credit refund in relation to another factory or unit and not pertaining to one from which the credit accrued. In any event, if this course is to be adopted, then compliance with Rule 10 of the Cenvat Credit Rules, 2004 would have been necessitated. Therefore, the findings in the majority opinion are erroneous and perverse.

Respondent’s contention:- The respondent submits that the petitioner relies upon Rule 10 and which envisages transfer of Cenvat credit from one account/unit to another account/unit. He father submits that this is not the case of transfer. Moreover the cenvat credit refund may have been in relation to distinct factory or unit, but of the same assessee/applicant.

Reasoning of judgment:- Oncareful consideration of submissions made by both sides,the settlement commission in the majority opinion held that the respondent has not in any manner contravened the Rules and accordingly there is no prohibition in seeking refund of the accumulated credit pertaining to second unit since second unit that has closed down belongs to assessee itself and therefore Commission allowed the assessee to claim refund of the credit belong to closed unit.
The commission provides that findings in Para 6.4 of the order of the majority,do not raise any substantial question of law nor does it reflect any non-application of mind and accordingly impugned order is vitiated by an error of law apparent on the face of record or perversity either.In these circumstances and when the claim has been granted by relying upon the peculiar fact pertaining to the assessee, then, this is not a fit case for interference in writ jurisdiction and the view taken is a possible one.

Decision: -The Writ Petition is devoid of merit and is dismissed.

Comment:- The settlement commission announced its decision in favor of respondent as the closed unit of which cenvat credit has been availed belong to the same assessee, therefore, it does not amounts to transfer of credit. Accordingly, no such condition exist which implies non compliance of Rule 10 of Cenvat Credit Rules and therefore petition stands dismissed due to devoid of merit.

Prepared by:- Manish Satyani

Comments

PJ/CASE LAW/2015-16/2989

Post a Comment

Query