No refund of outstanding CENVAT credit after closure of factory

Last updated: 11 August 2023

Court :
CESTAT, Chennai

Brief :
The CESTAT, Chennai in M/s. Alfred Berg & Co., (I) Pvt. Ltd. v. The Commissioner of GST and Central Excise [Excise Appeal No. 41009/2018 dated August 02, 2023] held that no refund of unutilized CENVAT credit after stopping manufacturing due to sale of business to another company.

Citation :
Excise Appeal No. 41009/2018 dated August 02, 2023

The CESTAT, Chennai in M/s. Alfred Berg & Co., (I) Pvt. Ltd. v. The Commissioner of GST and Central Excise [Excise Appeal No. 41009/2018 dated August 02, 2023] held that no refund of unutilized CENVAT credit after stopping manufacturing due to sale of business to another company.

Facts

M/s. Alfred Berg & Co., (I) Pvt. Ltd. ("the Appellant") was a manufacturer who had stopped their manufacturing activities and sold the assets to another company. The Appellant then filed a refund claim of the accumulated balance of CENVAT credit ("the Credit").

A show cause notice proposing denial of the refund claim was issued to the Appellant. Subsequently, the adjudicating authority passed an order ("the Impugned Order") rejecting the refund claim.

Aggrieved by the Impugned Order, the Appellant filed an appeal before the CESTAT, Chennai.

Issue

Whether the Appellant is eligible for a refund of the credit outstanding in their CENVAT account at the time of closing of factory?

Held

The CESTAT, Chennai in Excise Appeal No. 41009/2018 held as under: -

Noted that, the facts of the present case are similar as in Gauri Plasticulture Pvt. Ltd. v. Commissioner of Customs Excise, Indore 2019 (30) GSTL 224 (Bom.) wherein the Hon’ble Bombay High Court denied the refund of CENVAT credit to the assessee after closure of factory.
Held that, the Appellant is not eligible for a refund of the credit outstanding in their CENVAT account at the time of closure of his factory.