By TIOL News Service

CHENNAI, AUG 26, 2016 : THE appellant had to close their unit manufacturing colour films and colour paper due to change in technology. At the time of closure of the unit, they had a closing balance of CENVAT Credit of Rs.50,45,522/-. The Appellant had filed a refund claim which was rejected by the Adjudicating Authority. The Commissioner (Appeals) also upheld that rejection. Hence the assessee is in appeal before the CESTAT.

The appellant relied on various precedent decisions in support of the claim for refund. Revenue contended that refund is not admissible as per the decision of the Larger Bench in the case of Steel Strips vs. Commissioner of Central Excise, Ludhiana - 2011-TIOL-656-CESTAT-DEL-LB, wherein it has been held that since there is no express provision for grant of refund except in case of exports Rule 5, refund is not admissible on account of closure of unit.

After hearing both sides, the Tribunal held:

•  We are not inclined to accept to the case law relied upon by the department as the said case law did not consider the Hon'ble Karnataka High Court's judgment of Slovak India Trading Co. Pvt. Ltd. which has been subsequently upheld by the Hon'ble Supreme Court. Moreover, we also find that the Chennai Bench of the Tribunal in the case of M/s. Srinivasa Hair Industries Versus CCE, Chennai - 2016-TIOL-1203-CESTAT-MAD has allowed refund under Rule 5 of CENVAT Credit Rules, 2004 by placing reliance upon UOI vs. Slovak India Trading Co. Pvt. Ltd.