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TMI Blog2025 (3) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... e of notice of rule on behalf of the respondent State. 4. By this petition under Article 227 of the Constitution of India, the petitioners have prayed for quashing and setting aside the order dated 13.03.2024 whereby Form TRAN-1 of the petitioners was rejected by the Assistant Commissioner of State Tax, Bharuch as well as order-in-original dated 10.10.2019 passed by the respondent no.2 rejecting the refund claim application of the petitioners applying the provisions of section 142(8)(a) of the Central Goods and Service Tax Act, 2017 (For short "the CGST Act"). 5. Brief facts of the case are that the petitioner is engaged in the business of manufacture of various chemical products and during the course of business was granted Advance Authortization License dated 11.01.2016 by Director General of Foreign Trade (DGFT) allowing import of materials specified therein without payment of custom duties on condition that such duty free materials to be utilised by the petitioners for manufacture of goods for export. 6. The petitioners imported material by filing Bills of Entries dated 22.01.2016 and 19.02.2016. However, the petitioner could not fulfill the condition of export of goods manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit Rules,2004 in force prior to 30.06.2017 have ceased to operate and as the petitioners paid CVD and SAD aggregating to Rs. 51,69,758/- in April, 2018 for the raw materials and capital goods imported during January-February 2016, the credit of such duties could not be shown in Cenvat Register at the relevant time and as such balance of such Cenvat credit could also not be shown in Form TRAN-1 filed by the petitioners on 09.10.2017 to carry forward the outstanding balance in Cenvat Credit Register in the new GST regime. 11. It is the case of the petitioners that when the amount was deposited by the petitioners with the customs authority as import duties foregone on the raw materials as well as capital goods with reference to non fulfillment of the export obligations, the petitioners were aware that Cenvat credit on CVD and SAD aggregating to Rs. 51,69,758/- was admissible in their favour. However, as Form TRAN-1 was already filed by the petitioners on 09.10.2017 which was revised on 23.12.2017 and the time limit for filing Form TRAN-1 having expired on 27.12.2017, the petitioners were advised to file a refund claim under the Customs Act, 1962 read with the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Nos.32709-32710 of 2018 and allied matters directed the Central Government and GSTN to open common portal for filing TRAN-1 and TRAN-2 for two months i.e. with effect from 1.9.2022 till 31.10.2022. The period of two months was subsequently extended by one more month upto 30.11.2022 for allowing the assessees to file TRAN-1 and TRAN-2 for the left out carry forward of the credit in GST regime. 20. In view of order passed by Hon'ble Supreme Court, Special Civil Application No.9233/2020 was disposed off by this Court observing that decision of Hon'ble Supreme Court shall govern the rights of the parties. 21. The petitioners therefore, submitted another Form TRAN-1 electronically on the common portal on 18.11.2022 claiming the transitional credit of Rs. 51,69,759/-. 22. It is the case of the petitioners that because of the order passed by this Court for permitting the petitioners to manually file Form TRAN-1 and subsequently, for lodging it in common portal opened by GSTN, the petitioners gave up the challenge to the order-in-original dated 10.10.2019 in Special Civil Application No.9233/2020 and also made statement to the effect that the petitioners shall withdraw the refund cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 as well as order rejecting Form TRAN-1 dated 13.03.2024 along with verification report dated 08.02.2023. 28. Learned advocate Mr. Amal Dave for the petitioners submitted that the petitioners filed Form TRAN-1 pursuant to the order passed by the Hon'ble Supreme Court and as permitted by this Court while disposing off the Special Civil Application No.9233 of 2020. 29. It was submitted that petitioners are entitled to the credit of the amount deposited by it in 2018 towards CVD and SAD for non fulfillment of export obligation as input tax credit under GST regime and the respondents ought to have accepted Form TRAN-1 filed by the petitioners as per the provisions of section 140 of the CGST Act as export made by the petitioners was prior to 30.06.2017 and amount of duty paid by the petitioners pertains to the said export which otherwise would have been permitted to the petitioners to be utilised as Cenvat credit under the old regime. 30. It was further submitted in the alternative that respondent no.2 ought to have allowed the refund claim of the petitioners under section 142(3) read with section 142(6)(a) of the CGST Act and could not have rejected the refund claim of the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se emerging from the record, it is not in dispute that the petitioners imported goods as well as capital goods in the year 2016 under Advance Authorisation and EPCG license and as such, the petitioners did not pay the duties as required under the law on condition of fulfilling the export obligation. However as the petitioners could not fulfill the export obligation as required under the Advance Authorisation Scheme as well as EPCG Scheme, the petitioners voluntarily deposited duties including CVD and SAD on the goods imported by him in the year 2016 in the year 2018 i.e. after 01.07.2017 when the CGST Act came into force. Therefore, respondent authorities have rightly rejected the Form TRAN-1 filed by the petitioners manually as well as electronically pursuant to the order passed by this Court as the petitioners were not having any credit to be carried forward on 30.06.2017 in Electronic Credit Ledger to be utilised as input tax credit under the provisions of the CGST Act. 34. Therefore, the only question arises as to whether the refund claim rejected by the respondent authority vide order-in- original dated 10.10.2019 is valid or not. For that purpose relevant provisions of CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944): Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. (4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act. (8) (a) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act; (b) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 20.02.2024 has allowed the appeal. Hence, this appeal. 5. Learned counsel for the Revenue submitted that the Tribunal ought to have appreciated that the adjudicating authority did not have jurisdiction under Section 142 of the CGST Act. In support of the aforesaid submission, reliance has been placed on the Circular No.3/3/2017-GST dated 05.07.2017. 6. On the other hand, learned counsel for the assessee has supported the order passed by the Tribunal. 7. We have considered the rival submissions made on both sides and have perused the record 8. Admittedly, the assessee had paid the amount of CVD and SAD between the period August 2018 - March 2019 by way of regularisation of shortfall in fulfilment of the export obligation. The Tribunal has relied on Section 142(3) of the CGST Act and has held that the same provided that every claim for refund by any person before, on or after the appointed day for refund of any amount of central value added tax credit/duty/tax/interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the existing law. The Tribunal, by taking into account the provisions of sub sections (3), (5) and (8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004 as per the provisions of section 142(3) read with 142(6)(a) of the CGST Act,2017. Therefore, without disturbing the order rejecting Form TRAN-1 passed by the respondent authorities, so far as order-in-original dated 10.10.2019 rejecting the refund claim of the petitioner for Rs. 45,84,371/- is concerned, is herby quashed and set aside and the matter is remanded back to the respondent authorities so as to decide the refund claim of the petitioners on merits as per the provisions of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004 in view of provisions of section 142(3) read with section 142(6)(a) of the CGST Act, 2017 and we also hold that the provisions of section 142(8)(a) of the CGST Act have wrongly been invoked by the respondent authorities as the same would not be applicable when the petitioners had voluntarily deposited the amount of duty on non fulfillment of export obligation under the Advance Authorisation and EPCG Scheme and no amount of duties were paid in any recovery proceedings upon adjudication by the petitioners. 42. For the foregoing reasons, the petition is partly allowed by quashing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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