The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the refund of unutilised cenvat credit on closure of units.
The bench of Binu Tamta (Judicial Member) has observed that while the said request for transferring the credit amount was pending with the Department, the Central Excise Act, 1994 was repealed w.e.f. July, 2017 and as a result, the amount of cenvat credit accumulated could not be transferred to GST. The appellant had no other alternative but to seek the refund of the cenvat credit and the refund application was filed.
Background
The appellant/assessee has challenged the order by which the Commissioner (Appeals) rejected the refund application holding that the refund of unutilised cenvat credit on closure of units is not admissible in the absence of express statutory mandate or provisions of law.
The appellant was engaged in the manufacture of Cutting Oil at their registered address at Delhi under a valid Central Excise Registration.
The appellant had closed its unit at Delhi in the month of March, 2016 and had intimated the Department about the closure requesting them to transfer the accumulated cenvat credit at its Delhi Unit to its Unit at Gurgaon.
Issue Raised
The issue raised was whether the appellant is entitled to claim the refund of unutilised cenvat credit on closure of unit?
Conclusion
The CESTAT allowed the appeal and held that since closure of a factory is not a routine phenomenon but happens in rarest occasion, the ‘relevant date’ in context with the limitation for filing of refund application under such circumstances cannot be reckoned by reading Explanation Clause provided in Section 11B.
Case Details
Case Title: M/s. Kinol Lubes Pvt. Ltd. v/s Commissioner of Central GST Respondent and Central Excise
Case No.: Customs Appeal No.54844 of 2023
Date: 24.10.2024
Counsel For Appellant: Tarun Chawla
Counsel For Respondent: Manish Kumar Chawda
