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Case Law Details

Case Name : Suraj Ropes Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)
Appeal Number : Excise Tax Appeal No. 11986 of 2013- DB
Date of Judgement/Order : 23/06/2023
Related Assessment Year :
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Suraj Ropes Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)

Introduction: In an intriguing judgement from the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), a defunct manufacturing company’s claim for a refund of unutilised CENVAT credit was revisited. The case of Suraj Ropes Vs. Central Excise and Service Tax (C.E.&S.T.) department of Rajkot focuses on the refund eligibility of a manufacturer that ceased operations and surrendered their central excise registration.

Analysis: Suraj Ropes, the appellant, had accumulated CENVAT credit that remained unutilised by the time of their factory’s closure and registration surrender. The Assistant Commissioner had previously rejected their refund claim, stating that there were no provisions for such refunds under the Cenvat Credit Rules or Central Excise Rules.

The counsel for the appellant argued that since the factory had closed, they were unable to utilise the accumulated Cenvat credit balance and thereby applied for a refund. They claimed that this accumulation was a result of the difference in the excise duty rate on raw materials versus final products and export under bond/LUT.

CESTAT, after reviewing the records and arguments, noted that the appellant’s case needed verification, particularly in the context of refund claims for unutilised Cenvat credit on exported goods under bond and LUT. The tribunal found merit in the argument that the absence of an express provision for such refunds did not necessarily negate the possibility of a refund, leading them to remand the case back to the original authority for fresh consideration.

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July 2024