COMMISSIONER OF CENTRAL EXCISE Vs. FAL INDUSTRIES LTD.

JUDGEMENT

(1.) THE respondents in this appeal of the Revenue had availed Modvat credit of Rs. 2,53,551/ - on capital goods (imported by them) on the strength of Bill of Entry dated 30.11.1994. The original authority disallowed the credit to the party. The first appellate authority set aside the order of the lower authority and allowed the credit to the assessee. Pursuant to the order passed by the Commissioner (Appeals), the jurisdictional Deputy Commissioner allowed the assessee to take re -credit of the above amount in their CENVAT account. The party, however, could not take such re -credit as, by that time, they had closed down their unit followed by cancellation of Central Excise registration. Therefore, they requested for cash refund of the above amount, which was declined by the Deputy Commissioner. On an appeal, however, the Commissioner (Appeals) allowed cash refund to the assessee. Hence this appeal of the Revenue.

(2.) THE lower appellate authority relied on the Tribunal's decision in CCE, Ahmedabad v. Arcoy Industries to hold that the assessee was entitled to cash refund. The appellant has sought to distinguish the said case, by submitting that the assessee in that case was unable to avail Modvat credit on account of having moved out of the Modvat scheme and not on account of having closed down their unit. It is also submitted Page 0119 that the CBEC has permitted cash refund only in the case of export rebate. Reference has also been made to Sub -rule 3 of the erstwhile Rule 57S of the Central Excise Rules, 1944 and it has been stated that the said provision prohibited refund, in cash or by cheque, of any amount of capital goods credit.

(3.) LD . Consultant for the respondents has relied on the following decisions of the Tribunal in support of his submission that, as the assessee had closed down their unit and surrendered their registration and was consequently unable to take any Modvat credit, they were entitled to cash refund of the above amount: