Sandoz Pvt. Ltd. vs Commissioner of Central Excise, Belapur

Heard. Admit on the following substantial question of law.

Whether in the facts and circumstances of the case, the Tribunal was right in holding that the Additional Commissioner of Central Excise had no jurisdiction to sanction and grant refund under Rule 5 of the Cenvat Credit Rules, 2004 in view of Section 11B of the Central Excise Act, 1944?

Relevant facts are that by a common order-in-original dated 31st December 2010, the Additional Commissioner of Central Excise had sanctioned refund of unutilized credit of input and input service under Rule 5 of the Cenvat Credit Rules, 2004.

Challenging the order of the Additional Commissioner, in so far it relates to granting refund of unutilized credit of input, the Revenue filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) allowed the appeals and set aside the order passed by the Additional Commissioner on the ground that u/s 11B, the Additional Commissioner had no power to grant refund of unutilized Modvat credit. On further appeals filed by the assessee, the CESTAT upheld the order of the Commissioner (Appeals) on the ground that the Additional Commissioner while passing the order had not stated that he was exercising powers u/s 12E of the Central Excise Act, 1944. Challenging the aforesaid order, these appeals are filed by the assessee.

It is not in dispute that the assessee is entitled to refund of unutilized credit of duty paid on input. It is also not in dispute that the Additional Commissioner u/s 12E of the Central Excise Act, 1944 could exercise the powers vested in the authorities u/s 11B and grant refund of unutilized credit of duty paid on inputs. The fact that the Additional Commissioner while granting refund of unutilized input credit has not recorded that he is exercising power u/s 12E cannot be a ground to hold that the order passed by the Additional Commissioner was without jurisdiction. It is not the requirement of Section 12B that the Additional Commissioner would have jurisdiction to grant refund of unutilized credit of duty paid on input only if the said section is specifically mentioned in the order. Therefore, no fault could be found with the order passed by the Additional Commissioner merely because the said order does not refer to Section 12B in the impugned order.

In this view of the matter, the order passed by the Commissioner (Appeals) as also the CESTAT are quashed and set aside and the order granting refund of unutilized input credit by common order-in-original dated 31st December 2010 is upheld. All the appeals are allowed in the above terms with no order as to costs.