TMI Blog2024 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the specified tax limit as would have been otherwise required under Section 142(9)(b). Reliance placed by Revenue on the judgment of Hon ble High Court of Jharkhand in the case of Rungta Mines vs CCE, Jamshedpur [ 2022 (2) TMI 934 - JHARKHAND HIGH COURT] is quite relevant to appreciate the scope of Section 142(3) of the Act. In this case, it was held that the provision of Section 142(3) does not entitle a person to seek refund where no such right occurs under the existing law or under new CGST regime in terms of provision of CGST Act and the rules framed and notification issued thereunder. Meaning thereby, Section 142(3) does not confer a new right, which never existed under the old regime to the manner of giving relief, if the person is not entitled under the existing law - The ratio of the aforesaid judgment is squarely applicable to the facts of the case, in so far as the interpretation of Section 142(3) of the Act is concerned. It must also be noted that a plain reading of this provision under the Act clearly supports this interpretation. Relying on the judgment of Hon ble High Court of Jharkhand in the case of Rungta Mines, it is found that when there was no provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn has been filed, as is required under provisions of Section 142(9)(b) of the Act, held that they were not entitled for refund of the same. In so far as the Service Tax credit component was concerned, the department felt that the said refund does not fit into the provisions under Section 142(9)(b) of the Act. Additionally, they felt that this component is also hit by time bar as well as unjust enrichment as required under Section 11B(2) of the Central Excise Act, 1944. 3. On adjudication, the Original Authority held that the appellants were not entitled for refund of Central Excise component of credit under the provisions of Section 142(3) of the Act (though they had initially claimed the same under Section 142(9)(b) of the Act). Primarily, the Adjudicating Authority felt that there is no relevant provision or statute under the Central Excise Act or Rules made thereunder in terms of which the Cenvat credit of Rs.14,40,627/- becomes refundable. According to him, such refund of credit was permissible under Rule 5 or 5B of erstwhile Cenvat Credit Rules. Therefore, on this count alone that there was neither any provision for granting such refund nor the assessee had transferred the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 142(3) and Section 142(9)(b) of the Act. Similarly, in respect of unjust enrichment also, relying on various judgments and statutory provisions under Section 11B(2) of Central Excise Act as made applicable to Service Tax, Commissioner (Appeals) came to the conclusion that principle of unjust enrichment was not applicable in the present case. 6. The appellants have come in Appeal against this impugned OIA rejecting the refund claim of Rs.14,40,627/-, relying mainly on the grounds that in absence of any specific provisions under GST law regarding Cenvat credit either not availed in the revised return filed or not transitioned to GST, in view of substantive provisions under Section 174 of the Act, they are entitled for refund in cash under Section 142(3) of the Act. They have also relied on plethora of judgments in support of their contention that if the appellants are not in a position to utilize Cenvat credit, cash refund can be made and granted. Learned Advocate for the appellant, in his argument has pointed out that though they had neither filed any revised ER-1 nor have carried forward the said amount of input credit in accordance with provisions under Section 140 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, since it was not eligible for cash refund under the erstwhile Central Excise Act, it would not get covered within the provisions of Section 142(3) of the Act. Further, admittedly, Section 142(9)(b) is not applicable in the facts of the case. In so far as case laws cited by the appellants are concerned, learned DR has rebutted their claim by pointing out as to why such cases cannot be relied upon in support of the contentions of the appellant for grant of cash refund under Section 142(3) of the Act. 10. According to DR, in the case of Ganges International Pvt Ltd (supra), the Hon ble Madras High Court has not decided any issue on the legality or scope of Section 142(3) but has remanded the matter back for decision on merit under Section 142(3). In the case of BHEL vs CGST CE, Chennai (supra), the Chennai Bench of the Tribunal has not considered some of the judgments like the judgment by the Hon ble Supreme Court in the case of UOI Ors. Vs Cosmo Films Ltd [2023 (5) TMI 42-SC] and Hon ble Bombay High Court s judgment in the case of Nelco Ltd vs UOI [2020-TIOL-641-HCMUM- GST] and therefore, the judgment passed by the Single Member Bench by ignoring all the relevant judgments and ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgment has been stayed by the jurisdictional High Court at Bhopal. 11. On the other hand, Learned DR relies on the following case laws in support of their contention that cash refund is not permissible in the facts of the case under Section 142(3) of the Act. (i) BHEL vs CCE, Secunderabad [Final Order No. A/31159/2019 dt.23.12.2019] (ii) Mylan Laboratories Ltd vs CCE, Secunderabad [Final Order No. A/30689/2020 dt.25.02.2020] (iii) Banswara Syntex Ltd vs CCE ST, Udaipur [2019 (365) ELT 773 (Raj.)] (iv) Tecumseh Products India Pvt Ltd vs CCT, Hyderabad [Final Order No. A/30018/2023 dt.17.03.2023] (v) CCE, C ST, Tirupati vs Rani Plastic Pipe Industries [2020 (6) TMI 356 CESTAT Hyderabad] (vi) Phoenix Industries Pvt Ltd vs CCE, Raigad [2014 (10) TMI 677 CESTAT Mumbai] (vii) Idol Textile Ltd, Balaji Prints Ltd vs CCE [2019 (9) TMI 16 CESTAT Mumbai] (viii) Mahavir Metal Manufacturing Co. vs CCE CGST, Rajasthan [Final Order No. 50591/2023 dt.23.05.2023] (ix) Lata Hydrocarbon Resources Pvt Ltd vs CCT, Rangareddy [2019 (12) TMI 1060 CESTAT Hyderabad] (x) Saera Electric Auto Pvt Ltd vs CCE ST, Gurgaon-I [2020 (372) ELT 452 (Tri-Chan.)] (xi) RHEC INC vs CCE, Alwar, Rajasthan [2024 (4) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in their case where they have actually sought refund under Section 142(3) of the Act. 13. Heard both the parties and perused the record. 14. The crux of the issue is whether the appellants are entitled for refund of input credit, which was neither transitioned in accordance with TRAN-1 procedure into the new regime nor got reflected in the ER-1 or revised ER-1 return post 01.07.2017. The admitted fact is that the appellants, on reconciliation of their financial accounts, found that they had not taken the credit of Rs.14,40,627/-. They also agreed that they had not filed any revised ER-1/ER-2 for taking this credit. Their main line of argument is that this is their substantive right and therefore, they are entitled for that credit and since the credit could not be taken on record before 01.07.2017, the only option left is to get the refund of this credit in cash, as provided under Section 142(3) of the Act. On the other hand, the department s argument is that on strict construction of the provisions made in the GST laws for getting such refunds in cash in respect of certain input/input service credit, provisions stipulated therein has to be complied with. Since the refund of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out of transition from erstwhile Central Excise Act and Finance Act to the GST regime. 17. In this case, admittedly, appellants have neither filed revised ER-1 nor carried forward this credit in TRAN-1 in accordance with the procedure prescribed under Section 140 read with the relevant Rules and Notifications made thereunder. The appellants have mainly relied on certain judgments like Adfert Technologies Pvt Ltd vs UOI [2019-TIOL-2519-HC-P H-GST), which has been affirmed by the Apex Court in UOI vs Adfert Technologies Pvt Ltd [2020-TIOL-64-SC-GST], wherein it was held that transitional credit is a vested right. They also relied on the decision of Tribunal in case of Jagdamba Polymers Ltd vs CCE, Ahmedabad (supra) in support of their argument that failure to reflect Cenvat credit balance in ER-1 return is only a procedural omission and credit should not be denied on this ground. They have mainly emphasized that the department has not challenged the legitimacy of impugned credit. 18. I have perused the judgments relied upon by the appellant and I find that reliance is being placed on such judgments without appreciating the fact that in this case, the entire issue is regarding refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icit provisions under the Act for carrying forward such credit or for claiming refund of such credit in cash. 20. I have also gone through some of the judgments relied upon by the Department in support of their contention that if there is no specific provisions under the existing law then the refund cannot be granted under the GST provisions, as held by Hyderabad Bench of this Tribunal in the case of Bharat Heavy Electricals Ltd vs CCE, Secunderabad [Final Order No. A/31159/2019 dt.23.12.2019]. The same Bench in the case of Mylan Laboratories Ltd vs CCE, Secunderabad [Final Order No. A/30689/2020 dt.25.02.2020] also held that such refunds are not admissible relying on the judgment of Larger Bench of Hon ble High Court of Bombay in the case of Gouri Plasticulture Pvt Ltd vs CCE, Indore [2019-TIOL-1248-HC-Mum-CXLB]. I find that the appellants have also relied on the judgment in the case of OSI Systems Pvt Ltd vs CCT, Rangareddy [2022 (9) TMI 801 CESTAT Hyderabad] and also in the case of NCL Industries vs CCT, Hyderabad [2024 (1) TMI 1254 CESTAT Hyderabad]. While the subject matter of appeal in case of OSI Systems Pvt Ltd (supra) was applicability of principle of unjust enrichment und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act, subject to provisions under the relevant Rules and procedures. The second provision was in terms of Section 142(3) and third under Section 142(9)(b). A plain reading of the provisions would indicate that, inter alia, refund of any amount of tax or Cenvat credit has to be disposed off in accordance with the provisions of the existing law and any amount eventually accruing to him shall be refunded to be paid in cash only, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of Sub-section (2) of Section 11B. Therefore, it is obvious that refund has to be examined first in terms of the relevant provisions, as it existed under the existing law, in this case Cenvat Credit Rules, 2004 or the Finance Act, 1994. 23. The perusal of CCR, 2004 under the existing law clearly brings out that the refund of unutilized Cenvat credit can be made only for specific purpose covered under Rule 5, 5A and 5B, subject to certain prescribed/notified procedure, conditions and limitations etc., as may be specified or notified by notification in this regard. They have also admittedly not filed any revised ST-3 within the specified tax lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled under the existing law as the entire claim is mandated to be dealt with as per the existing law. It neither revive any right which stood extinguished in terms of the existing law nor does it create a new right by virtue of coming into force of CGST, Act. 46. Section 174 of the CGST Act read with section 6 of the General Clauses Act saves the right acquired, accrued or vested under the existing law and does not create any new right which never existed on the appointed day i.e on 01.07.2017 under the existing law. 47. The argument of the petitioner by referring to second proviso to section 142(3) of CGST Act that it indicates that section 142(3) would apply to the situations where the assessee has failed to take transitional credit under section 140(1), is also devoid of any merits. The second proviso only indicates that if the assessee has taken transitional credit he will not be entitled to refund. Certainly, an assessee cannot simultaneously claim transitional credit as well as refund of the same amount. The second proviso to section 143(2) cannot be said to be an eligibility condition to claim refund but is only a condition which governs refund as an assessee cannot be pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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