Case Law Details
Mahavir Metal Manufacturing Company Vs Commissioner (Appeals) (CESTAT Delhi)
Adjudicating Authority has not committed any error while holding that Rule 5 of Cenvat Credit Rules, 2004 cannot be invoked to sanction the refund of unutilized Cenvat credit lying with the appellant much prior to April, 2017 that too in cash as per Section 140 of CGST Act, 2017.
FULL TEXT OF THE CESTAT DELHI ORDER
The appellant was engaged in manufacturing of umbrella/ umbrella parts and the duty structure was almost just half on the finished goods as compared to the imports in terms of Notification No. 12/2002-CE dated 17.03.2012. This resulted in accumulation of central excise duty and the corresponding Cenvat credit for an amount of Rs. 42,17,938/-. As such, a refund claim for the said amount of unutilized Cenvat credit was filed by the appellant on 15.04.2019 under Rule 5 of Cenvat Credit Rules, 2004. The appellant, on being enquired, had informed that their factory got closed in the financial year 2016- 2017 and they had already applied to disconnect the power supply by their letter dated 19.04.2017 and 10.05.2017. The supply was finally disconnected on 22.09.2017. The appellant also informed that they had migrated under GST, however, had not filed Trans-1 due to which the aforesaid amount of unutilized Cenvat credit could not be carried forward and was still lying in their books of account.
2. Being unsatisfied with that response, the Department served a show cause notice bearing No. 2302 dated 01.11.2019 upon the appellant proposing the rejection of the refund claim of accumulated Cenvat credit. The said proposal was confirmed initially vide order-in-original No. 169/2020-21 dated 29.07.2020 on the ground that Rule 5 of Cenvat Credit Rules is not available for the purpose of refund that too after the closure of the factory. It was rejected also on the ground that post introduction of CGST Act the appellant has failed to transfer the closing balance of Cenvat credit through Trans-1 as was mandatory in terms of Section 140 of CGST Act 2017. Section 11B of Central Excise Act is also held not applicable to the given facts and circumstances. These findings were confirmed by Commissioner (Appeals) vide order-in-appeal No. 309/2020 dated 15.10.2020. Being aggrieved of these findings that the appellant is before this Tribunal.
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