By TIOL News Service

JAIPUR, MAR 06, 2018: THE Appellant was manufacturing medicine, namely, Odoxin. A duty of 4% was paid on Odoxin whereas input credit utilized in manufacture of Odoxin suffered a duty of 10 percent on local inputs and 14% on imported inputs.

As a result, there was wide gap between CENVAT credit availed and duty paid on the final product.

The appellant closed their factory on 31.03.2011 and applied for cash refund of the CENVAT amount of Rs.1,34,45,987/- lying unutilized in their CENVAT credit account, in terms of rule 5 of CCR, 2004.

This claim was rejected by the Assistant Commissioner and the order was upheld by the Commissioner(A) as well as the Tribunal.

In appeal before the Rajasthan High Court, the appellant places reliance on the decision in Slovak India Trading Co. Pvt. Ltd., 2006-TIOL-469-HC-KAR-CX, wherein a similar claim has been allowed. Furthermore, it is submitted that the SLP filed by the department against the referred order was dismissed by the apex court.

Support is also drawn from the following decisions -

+ Commissioner of C. Ex., Nasik vs. Jain Vanguard Polybutlene Ltd. - 2010-TIOL-911-HC-MUM-CX ,

+ M/s Rama Industries Ltd. vs. Commissioner of Central Excise, Chandigarh - 2009-TIOL-100-HC-P&H-CX

+ Eicher Motors Ltd. vs. Union of India - 2002-TIOL-149-SC-CX-LB

+ Collector of Central Excise, Pune vs. Dai Ichi Karkaria Ltd. - 2002-TIOL-79-SC-CX-LB

The Counsel for the Revenue sought to justify the impugned order by relying on the following cases and emphasising that dismissal of special leave petition in limine does not clothe the decision under appeal in special leave petition with the authority of the decision of the apex Court; that an order rejecting the Special Leave Petition at the threshold without detailed reasons does not constitute any declaration of law or a binding precedent -

+ Kunhayammed and Ors. vs. State of Kerala and Anr. - 2002-TIOL-50-SC-LMT-LB

+ Raja Jagdambika Pratap Narain Singh vs. Central Board of Direct Taxes and Ors., - 2002-TIOL-1202-SC-IT-LB

+ Late Nawab Sir Mir Osman Ali Khan vs. Commissioner of Wealth Tax, Hydrabad - 2002-TIOL-225-SC-WT

+ Fuljit Kaur vs. State of Punjab and Ors. - 2010-TIOL-140-SC-CUS

After extracting rule 5 of the CCR and the decision of the Karnataka High Court in Slovak India Trading Co. (supra), the High Court inter alia observed -

"12. Four different High Courts have also taken the view against which the SLP was preferred and earlier also the Tribunal granted refund against which the SLP was not preferred. In that view of the matter, the principle of estoppel applies as once the department has accepted the view taken by the Tribunal it will not be appropriate to challenge the same by choosing the present assessee.

13. In our considered opinion, the judicial discipline is required to be maintained. The Tribunal cannot distinguish the High Court judgments. They are bound by the High Court judgments even jurisdictional High Court and at the most they can refer it back prior to distinguish on facts but no authority has been made. Full Bench decision of the Tribunal has to be followed."

The view taken by the Karnataka High Court (supra) was approved and the appeal was allowed by answering the issue in favour of assessee and against the department.

(See 2018-TIOL-380-HC-RAJ-CX)