M/S WELCURE DRUGS AND PHARMACETICALS LTD V. COMMISSIONER OF CENTRAL EXCISE JAIPUR

CRW/33/2018

AI Insights

The case involves M/s Welcure Drugs and Pharmaceuticals Ltd. as the petitioner, who sought a review of the order dated 07.02.2018 in the context of a Central Excise Appeal. The petitioner requested the incorporation of certain judgments that were not mentioned in the original order but were relevant to the issues discussed. The court, upon reviewing the omitted judgments, modified the order to include them, thereby rectifying the oversight. The legal discourse centered around the interpretation and application of the Cenvat Credit Rules, particularly concerning the refund of unutilized Cenvat credit and the conditions under which such refunds are permissible.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 692874 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 07-05-2018
• Assessment Year: misc
• Other Referred Cases: East India Commercial Co. Ltd. vs. Collector of Customs, Calcutta, Commissioner of Income-tax vs. Thana Electricity Supply Ltd., N.R. Paper & Board Ltd. vs. Deputy Commissioner of Income-tax, Purvi Fabrics & Texturise (P) Ltd. vs. Commr. Of C. Ex., Jaipur-II, Steel Strips vs. Commissioner of C. Ex., Ludhiana, M.P. State CO-OP, Oilseed rower’s Federation Ltd. vs. C.C.E., Bhopal, Phoenix Industries Pvt. Ltd. vs. CCE, Raigad, Nav Durga Steel Products v/s Comm. Of C. Ex. Chandigarh, Birla Corporation Ltd. vs. Commissioner of Central Excise, Pune-I
• Laws Referred To: Limitation Act, Central Excise Act, 1944, Cenvat Credit Rules, 2004
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SIDDHARTH RANKA
• Assessee Lawyers: SAMEER JAIN
• Keywords: CENVAT credit; Delay Condoned; Legal provisions; Refund of Unutilized Credit; Review Application
• Section: 5; 11B; 57F

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Misc. Review Application No. 33 / 2018 IN D.B. Central Excise Appeal No.118/2017 M/s Welcure Drugs and Pharmaceuticals Ltd. Having Its Office At B9 & B10, Laxmi Towers, LSC, Block -C, Saraswati Vihar , Delhi 110034 Through Its Authorized Signatory Shri D.C. Jain, S/o Late T.C. Jain Aged 77 Years R/o E-1052 Saraswati Vihar Delhi 110034 ----Petitioner Versus Commissionerb of Central Excise Jaipur, NCR Building Statute Circle, C-scheme Jaipur Now Known As, Commissioner of Central Goods and Service Tax & Central Excise Alwar Having Its Office At New Central Revenue Building A Block Surya Nagar, Alwar in the State of Rajasthan ----Respondent _____________________________________________________ For Petitioner(s) : Mr. Sameer Jain For Respondent(s) : Mr. Siddharth Ranka _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Order 07/05/2018 1. Delay condoned. Application under Section 5 of the Limitation Act is allowed. 2. By way of this application, the applicant has prayed for following relief: “A. This application may kindly be allowed and the above aspects / issues be considered and the order dated 07.02.2018 (Annexure A/1) be rectified, modified and reviewed forthwith in respect of this application of the humble applicant-respondent; B. The assessee respondent be granted relief to the extent that the judgments relied and (2 of 21) [CRW-33/2018] referred upon by the counsel of the respondent department be incorporated and referred in the order dated 07.02.2018 passed by the Hon’ble Court.” 3. Having perused the order dated 7.2.2018, it appears that inadvertently the following judgments cited by counsel for applicant-respondent in Para 8 of the judgment were not mentioned. Now in para 8 the following judgments may also be added. Therefore the same are quoted as below: 1. East India Commercial Co. Ltd. vs. Collector of Customs, Calcutta, 1983 (13) ELT 1342 (SC), wherein it has been observed as under: 3. A tribunal cannot ignore the law declared by the High Court. \"It would be anomalous to suggest that a tribunal over which the High Court has superintendence can ignore the law declared by that Court and start proceedings in direct violation of it........ It is implicit in the power of supervision conferred on a superior tribunal that all the tribunals subject to its supervision should conform to the law laid down by it.....We, therefore, hold that the law declared by the High Court in the state is binding on authorities or tribunals under its superintendence and that they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding\". 2. Commissioner of Income-tax vs. Thana Electricity Supply Ltd., [1994] 206 ITR 727 (Bombay), wherein it has been observed as under: On a careful consideration of the submissions of learned counsel for the assessee, we find that before taking up the issue involved in the question of law referred to us in this case for consideration, it is necessary to first decide the last submission of learned counsel that this court, while interpreting of an all-India statute like the Income Tax Act, is bound to follow the decision of any other High Court and to decide accordingly even if its own view is contrary (3 of 21) [CRW-33/2018] thereto, in view of the practice followed by this court in such matters. Because, if we are to accept this submission, it will be an exercise in futility to examine the real controversy before us with a view to decide the issue, as in that case in view of the Calcutta decision whatever may be our decision on the question of law referred to us, we would be bound to follow the decision of the Calcutta High Court and answer the question accordingly. This submission, in our opinion, is not tenable as it goes counter not only to the powers of this court to hear the reference and decide the questions of law raised therein and to deliver its judgment thereon but also to the doctrine of binding precedent known as stare decisis. We shall deal with the reasons for the same at some length a little later. We have also carefully gone through the decisions of this court referred to by counsel for the assessee in support of his above contention. In our opinion, the observations in those decisions have not been properly appreciated. They have been too widely interpreted. There appears to be a misconception about the nature thereof and their binding effect. We shall also refer to those decisions and the relevant observations therein and discuss their nature. Before doing that, it may be expedient to briefly state the doctrine of binding precedent, commonly known as stare decisis. At the outset, it may be appropriate to point out the well settled legal position that what is binding on the courts is the ratio of a decision. There is a clear distinction between on the courts is the ratio of the decision, obiter dicta and observations from the point of view of precedent value or their binding effect. It will be necessary in this case to explain this distinction. But before we do so, we may discuss the principle of binding precedent. This will take us to the question whose decision binds whom. For deciding whose decision is binding on whom, it is necessary to know the hierarchy of the courts. In India, the Supreme Court is the highest court of the country. That being so, so far as the decisions of the Supreme Court are concerned, it has been stated in article 141 of the Constitution itself that : \"The law declared by the Supreme Court (4 of 21) [CRW-33/2018] shall be binding on all courts within the territory of India.\" In that view of the matter, all courts in India are bound to follow the decisions of the Supreme Court. Though there is no provision like article 141 which specifically lays downs the binding nature of the decisions of the High Courts, it is a well accepted legal position that a single judge of a High Court is ordinarily bound to accept as correct judgments of courts of co-ordinate jurisdiction and of the Division Benches and of the Full Benches of his court and of the Supreme Court. Equally well settled is the position that when a Division Bench of the High Court gives a decision on a question of law, it should generally be followed by a co-ordinate Bench in the subsequent case wants the earlier decision to be reconsidered, it should refer the question at issue to a larger Bench. It is equally well settled that the decision of one High Court is not a binding precedent on another High Court. The Supreme Court in Valliama Champaka Pillai v. Sivathanu Pillai, [1980]1SCR354, dealing with the controversy whether a decision of the erstwhile Travancore High Court can be made a binding precedent on the Madras High Court on the basis of the principle of stare decisis, clearly held that such a decision can at best have persuasive effect and not the force of binding precedent on the Madras High Court. Referring to the States Reorganisation Act, it was observed that there was nothing in the said Act or any other law which exalts the ratio of those decisions to the status of a binding law nor could the ratio decidendi of those decisions be perpetuated by invoking the doctrine of stare decisis. The doctrine of stare decisis cannot be stretched that far as to make the decision of one High Court a binding precedent for the other. This doctrine is applicable only to different Benches of the same High Court. It is also well-settled that though there is no specific provision making the law declared by the High Court binding on subordinate courts, it is implicit in the power of supervision conferred on a superior Tribunal that the Tribunals subject to its supervision would confirm to the law laid down by it. It is in that view of the matter that the Supreme Court in East India Commercial Co. (5 of 21) [CRW-33/2018] Ltd. v. Collector of Customs, AIR 1962 SC 1893 (at page 1905) declared; \"We, therefore, hold that the law declared by the highest court in the State is binding on authorities or Tribunals under its superintendence, and they cannot ignore it.......\" This position has been very aptly summed up by the Supreme Court in Mahadeolal Kanodia v. Administrator General of West Bengal,: [1960]3SCR578 : \"Judicial decorum no less than legal propriety forms the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if judges of co-ordinate jurisdiction in a High Court start overruling one another's decisions. If one Division Bench of a High Court is unable to distinguish a previous decision of another Division Bench, and holding the view that the earlier decision is wrong, itself gives effect to that view, the result would be utter confusion. The position would be equally bad where a judge sitting singly in the High Court is of opinion that the previous decision of another single judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench.\" The above decision was followed by the Supreme Court in Baradakanta Mishra v. Bhimsen Dixit, : 1973CriLJ19 , wherein the legal position was reiterated in the following words (at page 2469) : \"It would be anomalous to suggest that a Tribunal over which the High Court has superintendence can ignore the law declared by that court and start proceedings in direct violation of it. If a Tribunal can do so, all the subordinate courts can equally do so, for there is no specific provision, just like in the case of Supreme Court, making the law declared by the High Court binding on subordinate courts. It is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunal subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working; otherwise there would be (6 of 21) [CRW-33/2018] confusion in the administration of law and respect for law would irretrievably suffer.\" Having decided whose decision binds whom, we may next examine what is binding. It is well settled that it is only the ratio decidendi that has a precedent value. As observed by the Supreme Court in S. P. Gupta v. President of India,: [1982]2SCR365 : \"It is elementary that what is binding on the court in a subsequent case is not the conclusion arrived at in a previous decision, but the ratio of that decision, for it is the ratio which binds as a precedent and not the conclusion.\" A case is only an authority for what it actually decides and not what may come to follow logically from it. Judgments of courts are not to be construed as statutes (see Amar Nath Om Parkash v. State of Punjab,: [1985]2SCR72). While following precedents, the court should keep in mind the following observations in Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai: (1976)IILLJ186SC: \"It is trite, going by Anglophonic principles, that a ruling of a superior court is binding law. It is not of scriptural sanctity but is of ratio- wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu we cannot impart eternal vernal value to the decision, exalting the doctrine of precedents into a prison-house of bigotry, regardless of varying circumstances and myriad developments. Realism dictates that a judgment has to be read, subject to the facts directly presented for consideration and not affecting those matters which may lurk in the record. Whatever be the position of a subordinate court's casual observations, generalisations and sub selection determinations must be judiciously read by courts of co-ordinate jurisdiction.\" Decision on a point not necessary for the purpose of the decision or which does not fall to be determined in that decision becomes an obiter dictum. So also, opinions on questions which are not necessary for determining or resolving the actual controversy arising in the case partake of the character of obiter. Obiter observations, as said by Bhagwati J. (as (7 of 21) [CRW-33/2018] his Lordship then was) in Addl. District Magistrate, Jabalpur v. Shivakant Shukla, : 1976CriLJ945, would undoubtedly be entitled to great weight, but \"an obiter cannot take the place of the ratio. Judges are not oracles.\" Such observations do not have any binding effect and they cannot be regarded as conclusive. As observed by the Privy Council in Baker v. The Queen [1975] 3 All ER 55, the court's authoritative opinion must be distinguished from propositions assumed by the court to be correct for the purpose of disposing of the particular case. This position has been made further clear by the Supreme Court in a recent decision in CIT v. Sun Engineering Works P. Ltd: [1992]198ITR297(SC), where it was observed: \"It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this court. A decision of this court takes its colour from the question involved in the case in which it is rendered and, while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasoning.\" In the above decision, the Supreme Court, also quoted with approval, the following note of caution given by it earlier in Madhav Rao Jivaji Rao Scindia Bahadur v. Union of India, MANU/SC/0050/1970 : [1971]3SCR9: \"It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment.\" (8 of 21) [CRW-33/2018] It is thus clear that it is only the ratio decidendi of a case which can be binding - not obiter dictum. Obiter, at best, may have some persuasive efficacy. From the foregoing discussion, the following propositions emerge: (a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not every expression found therein. (b) The decisions of the High Court are binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extend beyond its territorial jurisdiction. (c) The position in regard to the binding nature of the decisions of a High Court on different Benches of the same court may be summed up as follows : (i) A single judge of a High Court is bound by the decision of another single judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision. Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. If he does not find himself in agreement with the same, the proper procedure is to refer the binding decision and direct the papers to be placed before the Chief Justice to enable him to constitute a larger Bench to examine the question (see Food Corporation of India v. Yadav Engineer and Contractor,). (ii) A Division Bench of a High Court should follow the decision of another Division Bench of equal strength or a Full Bench of the same High Court. If one Division Bench differs from another Division Bench of the same High Court, it should refer the case to a larger Bench. (iii) Where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred it reached after full consideration of the earlier decisions. (d) The decision of one High Court is neither binding precedent for another High Court (9 of 21) [CRW-33/2018] nor for courts or Tribunals outside its own territorial jurisdiction. It is well settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect. By no amount of stretching of the doctrine of stare decisis, can judgments of one High Court be given the status of a binding precedent so far as other High Courts or Tribunal within their territorial jurisdiction are concerned. Any such attempt will go counter to the very doctrine of stare decisis and also the various decisions of the Supreme Court which have interpreted the scope and ambit thereof. The fact that there is only one decision of any one High Court on a particular point or that a number of different High Courts have taken identical views in that regard is not at all relevant for that purpose. Whatever may be the conclusion, the decisions cannot have the force of binding precedent on other High Courts or on any subordinate courts or Tribunals within their jurisdiction. That status is reserved only for the decisions of the Supreme Court which are binding on all courts in the country by virtue of article 141 of the Constitution.” 3. N.R. Paper & Board Ltd. vs. Deputy Commissioner of Income-tax, [1998] 101 Taxman 525 (Gujarat), wherein it has been observed as under: “20. Now, we come to the submission of learned counsel for the petitioners that even if we may be of different opinion and hold the view that the pending regular assessments can proceed notwithstanding the fact that the previous year of such pending regular assessment was included in the block period for the assessment of the undisclosed income, we should refrain from taking such view in order to keep up uniformity with the contrary views taken by the Punjab and Haryana and the Kerala High Courts. It was submitted relying upon the decision of this court in Sarabhai Sons Ltd. : [1983]143ITR473(Guj) that there is a longstanding practice of following the views of (10 of 21) [CRW-33/2018] other High Courts, even if this High Court was of a different view on the point. It was pointed out from the said decision that the High Court had followed the decision of the Bombay High Court in Maneklal Chunilal and Sons Ltd. v. CIT : [1953]24ITR375(Bom) in which it was held that in conformity with the uniform policy which had been laid down in Income Tax matters, whatever the view of the High Court may be, we must accept the view taken by another High Court on the interpretation of the section of a statute, which is an all India statute. It was observed that even though this court may be persuaded to take a different view, it was not inclined to do so in view of the settled practice. It was noticed by the High Court that there was a long-standing practice under which the assessees had been given relief (under section 80J) to the extent of the capital employed and not proportionate relief to the extent of six per cent per annum in a case where the new industrial undertaking has worked only a part of the year as was contended for on behalf of the Revenue. The High Court has nowhere laid down any absolute proposition in the said decision that it lacked the power to take a different view in cases where some contrary view was expressed. The High Court was not inclined to disturb the longstanding practice and therefore it followed the decisions of the other High Courts. This ruling cannot be so read as to take away the power of the High Court to render its own opinion on the questions referred to it or to similarly circumscribe the constitutional powers of the High Court to entertain and decide the writ petitions under article 226 of the Constitution. The submission of learned counsel for the petitioners that if we are inclined to take a different view from the view taken by the Punjab and Haryana and the Kerala High Courts, we should refer the matter to a larger Bench, is wholly misconceived and uncalled for. Not only during the course of his arguments learned counsel submitted that we should not express a contrary view but even at the fag end of his arguments also he insisted that we should not take a different view than the one taken by the Punjab and Haryana High Court and the Kerala (11 of 21) [CRW-33/2018] High Court, relied upon by him in support of the petitioner's case. There can be no dispute about the proposition that in Income Tax matters which are governed by an all-India statute, when there is a decision of a High Court interpreting a statutory provision, it would be a wise judicial policy and practice not to take a different view. However, this is not an absolute proposition and there are certain well-known exceptions to it. In cases where a decision is sub silentio, per incuriam, obiter dicta or based on a concession or takes a view which it is impossible to arrive at or there is another view in the field or there is a subsequent amendment of the statute or reversal or implied overruling of the decision by a High Court or some such or similar infirmity is manifestly perceivable in the decision, a different view can be taken by the High Court. This is clearly borne out from the decision of this court in Arvind Boards & Paper Products Ltd. V/s CIT [1982] 137 ITR 635 (Guj) which had also taken into consideration the Bombay decision in the case of Maneklal Chunilal and Sons Ltd. (supra). 21. While the decision of any other High Court is entitled to our highest esteem and respect, the constitutional powers of the High Court in its writ jurisdiction cannot be reduced to simply matching the colours of the case at hand against the colours of many sample cases spread out upon its desk and accept the sample nearest in shade as the applicable rule. The system of law cannot be evolved by such mechanical process and no judge of a High Court worthy of his office, views the function of his place so narrowly. If that were all there was to our calling there will be little of intellectual interest about it. The choice of a path for us cannot be made so blind and unintelligent, to be followed without a survey of the route which has been travelled and of the place where it would lead. Necessarily therefore, reasons that are given in the decisions of other High Courts relied upon for the petitioners, which have great persuasive value as precedent are required to be considered and the consequences are to be noted and if it becomes impossible to agree with them, or if (12 of 21) [CRW-33/2018] there are no reasons at all and only announcements of legal precepts, the court would be free to give its reasons, which may not coincide with the conclusions reached in the persuasive precedent relied upon. The decisions of any High Court are after all not intended to be \"gag orders\" for other High Courts and do not have the effect of freezing judicial thinking on the points covered by them. This is why in Arvind Boards and Paper Products Ltd. : [1982]137ITR635(Guj) the court after reviewing the authorities on the subject, clearly spelt out exceptions, such as where the decision is sub- silentio, per incuriam, obiter dicta or based on a concession or takes a view which it is impossible to arrive at, etc., which would justify the High Court from taking its own view and not just follow the precedent which may otherwise have a persuasive value, though not binding.” 4. Lily Thomas and Ors. vs. Union of India and Ors., (2000) 6 SCC 224, wherein it has been held as under: “Division Bench is bound to follow the view of the Larger Bench until the same is reversed.” 4. On Rule 5 of Cenvat Credit Rules,2004, Mr. Ranka relied upon the following decisions: 1. Purvi Fabrics & Texturise (P) Ltd. vs. Commr. Of C. Ex., Jaipur-II, 2015 (319) E.L.T. 551 (S.C), wherein it has been observed as under: “Heard learned Counsel for the parties. Insofar as the claim of refund of the amount in cash, which has been rejected by the Tribunal is concerned, it also calls for no interference.” 2. Purvi Fabrics & Texturise (P.) Ltd. vs. Commissioner of Central Excise, Jaipur-II, [2004] 2004 tasmann.xom 224 (New Delhi – CESTAT), wherein it has been observed as under: (13 of 21) [CRW-33/2018] “Section 11B of the Central Excise Act, 1944 – Refund – Modvat credit – Refund of duty- Central Excise Rules do not contain any provision for refund of credit in cash except in the case of export which is an incentive measure to exporter – Refund of credit can be allowed only if excisable goods or inputs as such are exported – Refund of excess duty paid through modvat credit can be granted by way of credit in credit account if the same is in operation – appeal rejected.” 3. Steel Strips vs. Commissioner of C. Ex., Ludhiana, 2011 (299) E.L.T. 257 (Tri. - LB), wherein it has been observed as under: “Reference to Larger Bench – Maintainability Refund of unutilised/accumulated Ce credit of unit - CESTAT Larger Bench in Gauri Plasticulture [2006(202)E.L.T. 199 (Tribunal LB)] allowed such refund Assessee's submission that such decision be followed - Submission also that Revenue not filed appeal in number of cases where Tribunal allowed such refund Non-filing of appeal against order is no ground for refusing to consider matter on own merit No bar for Revenue to prefer appeal in another case Gauri Plasticulture permitted claim under equitable considerations but controversy remained unanswered as to whether refund of such nature was mandate of Act or the Rules Issue rightly called for reference. Refund of unutilised Cenvat credit on closure of unit - Reliance placed by assessee on Tribunal Larger Bench in Gauri Plasticulture which allowed duty debited in RG23A Part-II as cash refund when refund was otherwise due - Larger Bench held that if denial of credit compelled an assessee to pay duty out of PLA, refund of same was admissible in cash - Present case not on premise of refund otherwise due - Absence of express provision to grant refund, except in case of exports- Claim inconceivable when right to refund not accrue under law, claim of refund not a matter of right unless vested in law - Refund not admissible Rule 5 of Cenvat credit Rules, 2004. Refund - Right of refund - Claim of refund is not a matter of right unless vested by law - No injustice or hardship can be raised as plea to (14 of 21) [CRW-33/2018] claim refund in absence of statutory mandate - No equity or good conscience influence fiscal courts without the same being embedded to statutory provisions - Substantial compliance of law granting refund is sine qua non The purpose for which law has been made and its nature, the intention of the legislature in making the provision, the relation of the particular provision to other provisions dealing with the subject including the language of the provision are considerable factors in arriving at the conclusion whether a particular claim is in accordance with law. An eligibility criteria to get refund calls for a strict construction, although construction of a condition thereof may be given a liberal meaning if the same is directory in nature. Refund and exemptions - Rule of strict compliance - Doctrine of substantial compliance seeks to preserve need to comply strictly conditions important to invoke exemption and to forgive non-compliance for unimportant and tangential requirements - Question to be examined whether requirement relate to substance or essence of statute Mere attempted compliance not sufficient but actual compliance of such essential factors required. Words and Phrases - Substantial compliance means actual compliance in respect to substance essential to every reasonable objective of statute - Court should determine whether statute followed sufficiently so as to carry out intent of statute and accomplish reasonable objectives - Defence of substantial compliance cannot be pleaded if clear statutory prerequisite effectuating the object and purpose of statute not met.” 4. M.P. State CO-OP, Oilseed rower’s Federation Ltd. vs. C.C.E., Bhopal, 2016 (342) E.L.T. 436 (Tri. - Del.), wherein it has been observed as under: “2. The learned Counsel for the appellant submitted that the Tribunal and various High Courts held that for claiming refund of unutilized Cenvat credit availed on inputs used in the goods exported under bond, the time limit will not apply. The following case laws are referred to by the learned Counsel for the appellant:- (15 of 21) [CRW-33/2018] (a) Swagat Synthetics Ltd. vs. CCE, Surat reported in 2007(220) E.L.T. 949 (Tri. Ahmd.); (b) CCE & Cus., Surat I vs. Swagat Synthetics reported in 2008(232) E.L.T. 413 (Guj.); and (c) Global Energy Food Industries vs. CCE, Ahmedabad reported in 2010(262) E.L.T. 627 (Tri. Ahmd.). We find these decisions deal with situation where the refund arises due to inability of the assessee to utilize the credits as they were exporting the final product without payment of duty. Admittedly, in the present case, the accumulation of credit is not due to any export of final product by the appellant. Hence, the claim made under Notification No. 85/87-CE dated 01/3/87 itself is without any legal basis. The said notification is in terms of sub-Rule (3) of Rule 57F of Central Excise Rules. The refund of credit was allowed to the inputs used in or in relation to the manufacture of final products which are cleared for export under bond. Admittedly, the said notification has no application to the appellant's case. In such situation, we are not able to appreciate under which provision of law the present refund claim was preferred by the appellant. Neither the original order nor the impugned order discussed the legal provision under which the claim for the refund was made by the appellant. It is only mentioned that as the final product become exempted they were not able to use the credits lying in their book and hence the amount should be refunded in cash. In the absence of any legal provision in support of such refund claim we are not able to examine the merits of the claim. Regarding time limit, it is an admitted fact that the claim was filed after almost 10 years. No explanation has been provided by the appellant except to state that the provisions of Section 11B will not apply to the present case of refund. This position also, we are not able to appreciate in the absence of supporting legal provision. The learned Counsel relied on the decision of Hon'ble Karnataka High Court in Union of India vs. Slovak India Trading Co. Pvt. Ltd. reported in: 2006(201) E.L.T. 559 (Kar.), the Hon'ble High Court held that Rule 5 of Cenvat Credit Rule, 2002 does not expressly prohibit refund of unutilized credit in the event of closure of factory. We find in the present case, the appellant's factory was (16 of 21) [CRW-33/2018] functioning during the material time and the claim which was filed 10 years after was on the ground that the final product become exempted. The facts of the present case are materially different. Further, we refer to Tribunal's decision in Phoenix Industries Pvt. Ltd. vs. CCE, Raigad reported in 2015(330) E.L.T. 303 (Tri. Mumbai). The Tribunal examined the eligibility of refund under Rule 5 when the factory is closed. It was held refund of unutilized credit is only permissible in case of export of goods and not for any other reason. 3. We find in the present case apart from the fact that the claim is not supported by any legal provision, even on the question of time limit also the appellant is not having any case on merit. Accordingly, the appeal is dismissed. (Order pronounced in open court on 02/09/2016.) 5. Phoenix Industries Pvt. Ltd. vs. Commissioner of C.Ex. , Raigad, 2015 (330) E.L.T. 303 (Tri. - Mumbai), wherein it has been observed as under: “Cenvat credit - Refund not permissible on closure of factory - If it is allowed in such cases, then it has to be allowed in cases when inputs are not even used in manufacture of final product - It will lead to illogical result whereby duty paid on inputs is refunded without their use in manufacture of final products Also, it will mean that conditions and limitations (submission of documents such as shipping bills, etc.) specified in Rule 5 of Cenvat Credit Rules, 2004 read with Notification 5/2006 C.E. (N.T.) become superfluous. Cenvat credit - Refund of - Rule 5 of Cenvat Credit Rules, 2004 has to be read as whole and not in parts \"Such adjustment\" has to be read in context of whole sentence - \"Where for any reason such adjustment is not possible\" can only imply that refund in cash may be granted, only when Cenvat credit cannot be adjusted against duty on final products cleared for home consumption or for export on payment of duty - Any other interpretation would be against scheme of Cenvat credit which is to prevent cascading in taxation. (17 of 21) [CRW-33/2018] Interpretation of statutes - Legislative instrument has to be read as whole- Phrases in sentence have to be read in their cognate sense.” 6. Modipon Ltd. vs. Commissioner of C. Ex., Ghaziabad, 2015 (324) E.L.T. 718 (Tri. - Del.), wherein it has been observed as under: 6. We have considered the submissions from both the sides and perused the records. There is no dispute that the appellant's factory stopped production sometime in June, 2007 and at that time there was Cenvat credit balance of Rs. 2,35,86,612/- in their RG 23A Part-I and RT-23C pt. II account. In the appellants' application dated 27-11-2007, cash refund of the above Cenvat credit is sought by invoking Section 11B(2)(C). In our view, Section 11B is only for the refund of the duty paid either through cash or through Cenvat credit or of the Cenvat credit wrongly reversed which refund of duty paid either through cash or through Cenvat credit account is subject to the bar of unjust enrichment, the refund of wrongly reversed Cenvat credit is not subject to the bar or unjust enrichment. But this section cannot be invoked for cash refund of the unutilized Cenvat credit lying in the Cenvat credit account of a manufacturer at the time of closure of the factory. In fact, other than Rule 5 of the Cenvat Credit Rules, 2004, there is no provision either in Central Excise Act, 1944 or in any Rules made thereunder for cash refund of accumulated Cenvat Credit Rules, 2004. When a factory closes down, the Cenvat credit lying unutilized in its Cenvat credit account would lapse, unless the factory resumes production. In the event of the factory being taken over by another person, and resuming production, Rule 10 permits the transfer of Cenvat credit to the new owner subject to certain conditions. But there is no provision for cash refund of such unutilized credit. 7. Rule 5 of the Cenvat credit rules permits cash refund of accumulated Cenvat credit only in the following circumstances:- (1) The Cenvat credit which has accumulated and whose cash refund is sought is in respect of inputs/input services used in the manufacture (18 of 21) [CRW-33/2018] of finished goods which have been exported out of India under bond or letter of undertaking or used in intermediate products cleared for export. (2) The assessee is not in a position to utilize the Cenvat credit for payment of duty on finished goods cleared for home consumption or cleared for export under rebate claim. (3) The exports have not been made by claiming drawback or input duty rebate. 8. In the present case, none of the above conditions are satisfied. Therefore, the Commissioner (Appeals) has rightly upheld the rejection of the cash refund of the accumulated credit. We are supported in our view of the Larger Bench judgment of the Tribunal in the case of Steel Strips (supra).” 7. Nav Durga Steel Products v/s Comm. Of C. Ex. Chandigarh, 2014 (309)ELT 302 (Tri. - Del.), wherein it has been observed as under: 6. There is no dispute about the fact the fact that the appellants discharged their duty liability during the period 2006-2007 to 2009- 2010 either by way of payment through Cenvat credit or also by way of cash. This might have resulted in accumulation of Cenvat credit. However, the payments made towards the duty in cash, were proper and appropriated payment at that point of time. The assessment in respect of same also stand finalized. As such, at the end of the day, when the appellant is closing its factory, it has claimed refund of payment made in cash during preceding financial year on the ground that the same should be adjusted against the available credit at the time of closure of the factory. 7. First of all, we are not aware as to whether such credit was also available at the relevant time when the appellants made the payment in cash. Secondly, the appellants having made the payments in cash without any protest, even when there was credit available at the relevant time, cannot be allowed to take U turn at the end of closure of their factory. And thirdly, the assessment having been finlized cannot be opened after a period of 4 to 5 years so as to allow the assessee to make a claim of adjustment of cash payment with the credit (19 of 21) [CRW-33/2018] available. I also find that there is no provision for cash of Swaran Steel Industries v. CCE, Chandigarh reported as 2009 (245) ELT 483 (Tri-Del.) has held that there is no provision for cash refund of the unutilized Cenvat credit at the time of surrender of registration certificate on closure of unit. 8. In view of the foregoing, I find no merit in the appeal. The same is rejected.” 8. Birla Corporation Ltd. vs. Commissioner of Central Excise, Pune-I, 2011 (274) E.L.T. 529 (Tri.-Mumbai), wherein it has been observed as under: 4. The contention of the Revenue is that the appellants have paid the duty demanded by the department through CENVAT Credit Account alone and not by cash. In so far as the interest is concerned, the learned Counsel the Board’s Circular No. 275/37/2K-CX.8A dated 2-1-2002, wherein it has been clarified that refund in case of deposit, a simple letter from the person who has made deposit, requesting the return of the amount, along with interest should be given by mere a simple letter. In support of their contention they submitted that Larger Bench of the Tribunal in the case of M/s. Steel Strips V. Commissioner of Central Excise, Ludhiana -2011-TIOL-656-CESTAT-DEL-LB = 2011 (269) ELT 257 (Tri. LB) held that in absence of express provision to grant refund, that is difficult to entertain except in the case of export, where different has been paid through MODVAT. In the rejoinder, the learned Counsel submitted that the case cited by the Learned JDR is not applicable to their case. The learned Counsel also cited a case law in the case of Commissioner of Central Excise V. Jain Vanguard Polybutleme Ltd.-2010 (256) ELT 523 (Bom), wherein it was held that when question arising for consideration on fact almost identical to previous case, Revenue cannot be allowed to take different view. 5. I have carefully considered the submissions and perused the records. It is not in dispute that the appellants have paid the demand of CENVAT credit by debiting through CENVAT Credit Accounts, which they were alleged to have been wrongly availed by them. The lower authorities have allowed the refund by way of CENVAT (20 of 21) [CRW-33/2018] Credit. The above findings are not in dispute. Larger Bench of this Tribunal in the case of Steel Strips (supra) has held as under:- “5.16 Modvat law has codified procedure for adjustment of duty liability against Modvat Account. That is required to be carried out in accordance with law and unadjusted amount is not expressly permitted to be refunded. In absence of express provision to grant refund, that is difficult to entertain except in the case of export. There cannot be presumption that in the absence of debarment to make refund in other cases that is permissible. Refund results in outflow from treasury, which needs sanction of law and an order of refund for such purpose is sine qua non. Law has only recognized the event of export of goods for refund of Modvat credit as has been rightly pleaded by Revenue and present reference is neither the case of “otherwise due” of the refund nor the case of exported goods. Similarly absence of express grant in statute does not imply ipso facto entitlement to refund. So also absence of express grant is an implied bar for refund. When right to refund does not accrue under law, claim thereof is inconceivable. Therefore, present reference is to be answered negatively and in favour of Revenue since refund of unutilized credit is only permissible in case of export of goods and for no other reason whatsover that may be. As has been stated earlier that equity, justice and good conscience are the guiding factors for Civil Courts, no fiscal Courts are governed by these concepts, the present reference is bound to be answered in favour of Revenue and it is answered accordingly.” From the above, it is clear that in case of duty paid through CENVAT Credit account, the refund is to be given through CENVAT credit. The case laws cited by the learned Counsel in the cases of Slovak India Trading Co. (supra), Ashok ARC (supra) & Manish Spinning Mills (supra) relates to refund in the case of Rule 5 of Central Excise Rules. When the judgments in the cases of Deepti Chemical (supra) and Birla Corporation Ltd. (supra) were passed, the decision of Larger Bench was not before the Tribunal. In so far as decision of Hon'ble Bombay High Court in the case of Jain Vanguard Polybutleme Ltd. (supra) (21 of 21) [CRW-33/2018] is concerned undisputedly the High Court has held that when question arising for consideration on fact almost identical to previous case, Revenue cannot be allowed to take different view. Since the Larger Bench has already decided this issue, I have no reason to take any other view taken by the Larger Bench. 6. In view of the above, I do not find any reason to interfere with the concurrent findings of the lower authorities that the refund should be granted by credit in CENVAT Credit Account and not by cash. Accordingly, the impugned order is upheld and the appeal is dismissed.” 5. Order dated 07.02.2018 is modified accordingly. 6. The review petition is allowed. Conclusion of the appeal will remain the same. (VIJAY KUMAR VYAS) J. (K.S. JHAVERI)J. Chauhan/95 "