Cash refund of unutilized credit impermissible on closure of business

M/s. Gauri Plasticulture P. Ltd. vs. Commissioner of Central Excise (Bombay High Court)

The Larger Bench (LB) of Bombay HC rules in favour of Revenue, holds that cash refund u/s 11B of the Central Excise Act, 1944 is not permissible when CENVAT Credit on inputs remains unutilized on account of closure of manufacturing unit or inability to utilize input credit.

Issues:

• Whether cash refund is permissible in terms of clause (c) to the proviso to section 11B(2) of the Excise Act where an assessee is unable to utilize credit on inputs?

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