Order Date – 13 June 2023

Parties: Manmade Spinners India Ltd. Vs Commissioner of CGST, Kolhapur

Facts – 

• The Appellant, Manmade Spinners India Ltd., was directed to pre-deposit the amount of Rs.50 lakhs during the pendency of the appeal. The appellant paid the same by debiting their Input Credit Register and their Capital Goods Credit Register.
• The demand raised against the appellant was set aside but penalty was imposed/maintained of Rs. 5 lakhs. Accordingly, the appellant filed a refund claim for pre-deposit with a request to adjust the amount of Rs.5 lakhs against the penalty. The same was allowed.
• Subsequently a protective show cause-cum-demand notice dated 29.5.2007 was issued to recover the refunded cash amount with interest on the ground that the Appellate order dated 23.8.2006 has been challenged by the Revenue before this Tribunal.

Issue – 

• Whether the refund paid in cash is in order?

Order – 

• The Tribunal observed that the Order-in-Original dated 30.11.2006 sanctioning the refund of Rs.47,45,015/- in cash which was paid to the appellant. This order of sanctioning refund in cash has not been challenged anywhere by the department and the same attained finality.
• The issue involved here is no more res integra and Hon’ble High Courts and this Tribunal in the matters of CCE vs. Birla Textile Mills; 2015(325) ELT 651 (Del.) held that when the assessee is not in a position to utilize the credit, the amount is permitted to be refunded in cash although the same has been paid through their Cenvat Credit account.
• In the instant matter the appellant herein has requested for cash refund on the ground that they are working under exemption notification 30/2004-CE, dt. 9.7.2004 and hence not able to utilize the Cenvat Credit. Therefore, it was held that the appellant is entitle for the cash refund.