Order Date – 02 August 2023

Parties: M/s. Alfred Berg & Co., (I) Pvt. Ltd. Vs The Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. Alfred Berg & Co., (I) Pvt. Ltd., stopped their manufacturing activity in the year 2014 and sold the assets to another company namely M/s. Mesmer Pharmaceuticals through a Memorandum of Understanding dated 10.11.2014.
• The appellant filed a refund claim for refund vide their letter dated 18/7/2016 being the book balance outstanding in their CENVAT account. Show cause Notice dated 24/8/2016 was issued to the appellant proposing to deny the refund claim. After due process of law, rejected the refund claim.

Issue – 

• Whether the appellant is eligible for refund of unutilised credit lying in their CENVAT account at the time of closing the factory?

Order – 

• The Tribunal observed that The Honourable High Court of Bombay in the case of Gauri Plasticulture Pvt. Ltd. had occasion to consider the very same issue. The decision of the Honourable High Court of Karnataka in the case of Union of India Vs Slovak India Trading Co. Pvt. Ltd. (Karnataka) was referred to by the Honourable High Court. It was observed the Division Bench of the Honourable High Court of Karnataka in the said case took a view that there is no express prohibition in Rule 5 to refund the unutilised CENVAT credit. 
• The revenue filed an appeal against such decision before the Honourable Apex court, and on the basis of the representation made by ASG who appeared on behalf of the Union of India that in similar decisions passed by the Tribunal, the revenue had not filed any appeal, the Honourable Apex Court had dismissed the appeal filed by the revenue.
• Thus there was no declaration of law under Article 141 of the Constitution of India in the said case. After adverting to various decisions on the point the Hon’ble High Court of Bombay held that the refund cannot be granted.
• Hence it was held that the refund cannot be allowed. The appeal filed by the appellant is dismissed.