Order Date – 15 December 2022

Facts –

• The Appellant, M/s Emcure Pharmaceuticals Ltd, a manufacturer of ‘pharmaceutical products’ at three facilities in Pune.
• The refund of duties discharged during investigation into undervaluation of ‘physician samples’, cleared by them between 8th January 2005 and 6th November 2006, culminating in confirmation of demand of duties of central excise amounting to ₹ 1,51,38,431 that was substantially set aside in appeal.
• The appellant herein had remitted ₹ 1,32,60,035 by debiting CENVAT credit account and from ‘personal ledger account (PLA)’ and, following disposal of their appeal by the Tribunal restricting a liability to only ₹ 4,99,690, which were paid through cheque and CENVAT credit account of unit
• Asserting that this mode of consequential relief by restoration in CENVAT credit account of units that had since closed operation was tantamount to rejection of the claim by Commissioner of Central Excise (Appeals).

Issue –

• Whether the rejection of restoration in CENVAT credit account of units that had since closed operation is in order?

Order –

• The Tribunal observed that the finding of the Hon’ble High Court of Bombay is not limited to one of the circumstances in which refund under section 11B of Central Excise Act, 1944 arises. More to the point, the essence of CENVAT credit scheme, by the Tribunal in re Voltas Ltd, makes it abundantly clear that monetizing of accumulated credit is tantamount for determining the amount as not liable to duty in the hands of supplier-manufacturer.
• Impossibility of utilisation of such credit upon restoration is not valid ground for monetisation as an alternative. The restoration of credit has placed the appellant no differently from that of having carried forward the credit till closure of the units without having undertaken discharge of duty liability.
• Furthermore, duty liability had been discharged at the option of the appellant; in the revised appellate scheme, prescribed pre-deposit pending disposal was the sole mandate of law. The submission of the Learned Counsel for appellant is thus devoid of logic or merit.
• Appeal is dismissed.