M/s Kriti Industries (India) Ltd. vs CCE, Indore

The brief facts of the case are that the appellant is engaged in manufacturing of HDPE Pipes falling under Chapter 39 of the Central Excise Tariff

Act, 1985. The appellant also avails Cenvat credit of Central Excise duty paid on inputs and capital goods and service tax on the input services. During

the disputed period, the appellant had availed the exemption from payment of Central Excise duty in terms of Notification No.47/2002 dated

06/09/2002 in respect of clearance of goods to the Government undertakings. Since, the appellant did not maintain separate account of common inputs

used in the manufacture of both dutiable and exempted goods, it had debited an amount of Rs.3,17,65,805.97/- during the period January to March

2005. The exempted clearances of HDPE pipes as per the provisions of Rule 6(3)(b) of the Cenvat Credit Rules, 2004. Subsequently, the appellant

had filed the refund application on 01/02/2006, claiming refund of the said amount wrongly debited by it. The refund claim was filed by the appellant by

relying on the decision of this Tribunal in the case of Andhra Pradesh Paper Mills Ltd. vs. CCE, Visakhapatnam reported in 2005 (185) E.L.T. 371

(Tri. â€" Bang.), according to which there was no requirement to debit an amount from the Cenvat account. The refund application was rejected by

the Original Authority. On appeal, the learned Commissioner (Appeals) vide the impugned order dated 29/01/2007 has upheld the adjudication order.

While rejected the appeal filed by the appellant herein, the learned Commissioner (Appeals) has recorded the following findings in the impugned

order:-

“5. ….. In the present case the appellant have taken credit on common input namely HDPE granules which was used in the manufacture

of both dutiable and exempted products. Hence they are bound to pay the 10% amount as per Rule 6(3)(b) of the Cenvat Credit Rules, 2004

which they did at the relevant time and hence they cannot seek refund of such amount paid correctly and as per law. Accordingly, in view of

the Apex Court judgments in the case of Amrit Paper and Ichalkaranji Machine Centre (supra) as well as the Tribunal decision in the case

of Rallies India Ltd., mentioned above I hold that the refunds claimed by the appellants are not eligible to them and therefore the rejection

of the same vide the impugned order has to be upheld (though the Adjudicating Authority did it on different grounds)â€​.

Heard both sides and perused the appeal records. We find that the learned Commissioner (Appeals) has upheld the rejection of refund claim in the

adjudication order by placing reliance on the judgment of Hon’ble Supreme Court in the case of Amrit Paper vs. CCE, Ludhiana reported in 2006

(200) E.L.T. 365 (S.C.) and also the decision of Larger Bench of the Tribunal in the case of Rallies India Ltd. vs. CCE, Salem reported in 2007 (78)

R.L.T. 117 (CESTAT â€" LB). Further, we also find that the decision of Tribunal in the case of Andhra Pradesh Paper Mills Ltd. (supra) has already

been set aside by the Hon’ble Supreme Court reported in 2015 (319) E.L.T. 554 (S.C.). Appeal against the said decision of the Tribunal was set

aside by the Hon’ble Supreme Court by placing reliance on the judgment in the case of Amrit Paper (supra). Since, the appellant has filed the

refund application based on the decision of the Tribunal in the case of Andhra Pradesh Paper Mills Ltd. (supra), which is no more consider to be a

good law, we are of the view that rejection of refund claim by the authorities below will be sustained in the eyes of law.

Therefore, we dismiss the appeal filed by the appellant.

(Order dictated and pronounced in the open court.)