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TMI Blog2025 (5) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... to GST regime, the appellants factory at Nagpur was holding GSTN No. 27AACCS4955R1ZJ. The appellants avail CENVAT credit of duty/tax on inputs, capital goods and input services used in such manufacture of final products. The appellant had filed a refund application in the prescribed Form-R dated 28.03.2019 for refund of Rs.9,96,439/- being the credit of Additional duties of Customs/Countervailing Duty (CVD), Special Additional Duty of Customs (SAD) and Education Cess and Secondary & Higher education cess. These duties have been paid by the appellants vide challans dated 29.05.2018, 14.06.2018 and 04.09.2018, consequent to cancellation of export orders and resultant non-fulfillment of export obligation in respect of imports through Advance License, thereby necessitating payment of duty foregone at the time of import of machines under such Advance License, as authorised and certified by the Customs authorities at Nagpur. As these duties paid could not be transitioned as input credit under GST regime, the appellants had filed refund claim on 06.10.2018 with the jurisdictional Assistant Commissioner of Customs at Nagpur, who had directed them vide letter dated 31.12.2019 to file the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he advice of the DGFT authorities for redemption of export obligation in respect of imports through Advance Licenses, they had paid the duties of customs and additional duties of customs, education Cess and Secondary Higher Education Cess as required under the law. As these payment of duties were made during 2018, after coming into effect of the GST regime, the admissible credit amount of Rs.9,96,439/- could not effectively be carried forward as input credit to GST regime, and hence they had applied for refund of the same before the jurisdictional authorities. However, their request for refund was rejected by the various authorities below, who had dealt with the matter. 3.2 Learned Advocate stated that it is not in dispute that additional duty leviable under Section 3 of the Customs Tariff Act, 1975 (CVD) which is equivalent to the duty of excise, Education Cess & Secondary Higher Education Cess leviable was available as CENVAT credit under the provisions of the CENVAT Credit Rules, 2004. With advent of GST, the appellants though had paid the applicable duty as above, could not utilize credit of CVD, Education Cess & Secondary Higher Education Cess. He further submitted that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner (Appeals) in the impugned order and submitted that in view of the specific provisions for refund of CENVAT credit provided under Rule 5 of the CCR, the appeal for refund of CENVAT credit of CVD and Education Cess & Secondary Higher Education Cess in cash under Section 11B ibid, is not permissible. In this regard, he relied upon the order of the Hon'ble High Court of Jharkhand at Ranchi in the case of Rungta Mines Limited Vs. Commissioner of CGST & Central Excise, Jamshedpur - 2022 (67) G.S.T.L. 180 (Jhar.) and order of the Tribunal in the case of Servo Packaging Limited Vs. Commissioner of CGST & Central Excise, Puducherry - 2020 (373) E.L.T. 550 (Tri. - Chennai). Accordingly, he submitted that the impugned order is sustainable in law and prayed for rejection of the appeal filed by the appellants. 5. Heard both sides and perused the case records. The additional submission made in the form of written paper books in this case, by both sides, were also perused carefully. 6. The short issue for determination before the Tribunal is to decide, as to whether or not, the Additional duties of Customs/Countervailing Duty (CVD), Special Additional Duty of Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit 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 subsection (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: Provided 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; (b) Every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person : Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act : Provided further that the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 91 read with section 93 of the Finance (No. 2) Act, 2004 (23 of 2004); (via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007); xxx xxx xxx xxx (vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via);...." 8.1 Before I proceed with the present case in hand, the competency of the Tribunal in handling the orders passed under Section 142(2) of the CGST Act, 2017 in appeal before them, has been dealt by the Larger Bench of the Tribunal, and the reference made therein have been clarified in the Interim Order No. 40021/2023 dated 21.12.2023 in the case of Bosch Electrical Drive India Private Limited Vs. Commissioner of Central Tax, Chennai. The relevant paragraphs of the said order are extracted and given below: "48. The Division Bench of the Tribunal, while referring the matter to the Larger Bench had observed in paragraph 14.1 that an appeal would lie under section 112 of the CGST Act to the Appellate Tribunal constituted under the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of the CENVAT Credit Rules, 2004. Post introduction of GST regime, CVD on imported article is presently charged as Integrated Goods and Service Tax (IGST) which is levied under Section 5 of the IGST Act, 2017 and collected in terms of Section 3(7) of the Customs Tariff Act, 1975 and the same is allowed as input duty credit Section 16(1) of CGST Act, 2017. 9.2. Further, the fact on record as evidenced by Challans No. 5411 dated 29.05.2018; No. 5419 dated 14.06.2018 and No.5532, No.5533 both dated 04.09.2028 indicate that in respect of Advance Licenses No. 0310565400 dated 19.03.2010, No.0310664441 dated 11.11.2021, No.0310562489 dated 02.03.2010 and No.0310615408 dated 10.02.2011, respectively, the appellants had paid the applicable basic customs duty, CVD, education cess, secondary education cess thereon and interest upto date of payment, which were duly verified by the jurisdictional Inspector of Customs, Nagpur. No doubt, initially the imports were made duty free but for the reason that the appellants were granted four advance licenses as above, copies of which are placed in the file records as part of the appeal papers. It is also nowhere denied by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D paid by them and that was available to them as Cenvat credit which they could not take because of the inception of GST, should be refund to them under provisions of section 142(3) of the CGST Act. 32. However Section 142(3) of the CGST Act 2017 stipulate that refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be 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. 33. I find that the duties paid by the claimant while redemption of advance authorization are customs duties under Customs Act 1962. The customs duties paid by the claimant is not a Cenvat credit nor excise duty or service tax paid under the existing law i.e. Central Excise Act 1944 or Finance Act 1994, and therefore are not covered under Section 142(3) of the CGST Act 2017. 34. I also find that the customs duties paid by the claimant, was result of re assessment of Bills of Entry due to non fulfill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der advance authorisation in the year 2012-13 with concessional rate of duty i.e first assessment of imported goods completed that time only. Thereafter since they could not fulfil the export obligation they paid the full amount of customs duty applicable in the year 2018. Thus the duty was reassessed in the year 2018 and was paid by the appellant." 9.4 On careful consideration of the impugned order passed in this case, the highlighted/bold portion seems to be disjoint to the main finding recorded in paragraph 22. Firstly, on the face of the four challans through which the disputed duty/cess have been paid clearly indicated the relevant Advance License Nos. and such licenses also carry the name of the appellants being specifically mentioned therein. Further, such payment of duty/cesses made through in these challans, duly verified by the jurisdictional Inspector of Customs, are indicative of the fact that these are being paid in redemption of export obligation against such Advance Licenses as provided in Chapter 4 of the FTP and as per procedure provided by the DGFT & Department of Revenue. Hence, the finding made by the learned Commissioner (Appeals) that there is no document of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving considered the rival contentions, I find that the payment of CVD and SAD subsequently during GST regime, for the imports made prior to 30-6-2017 is not disputed under the advance authorisation scheme. It is also not disputed that the appellant have paid the CVD and SAD in May, 2018 & May, 2019, by way of regularisation on being so pointed out by the Revenue Authority. Further, I find that the Court below have erred in observing in the impugned order, that without producing proper records of duty paid invoices etc. in manufacture of dutiable final product, refund cannot be given. I further find that refund of CVD and SAD in question is allowable, as credit is no longer available under the GST regime, which was however available under the erstwhile regime of Central Excise prior to 30-6-2017. Accordingly, I hold that the appellant is entitled to refund under the provisions of Section 142(3) and (6) of the CGST Act. 8. Accordingly, I direct the jurisdictional Assistant Commissioner to grant refunds to the appellants of the amount of SAD & CVD as reflected in the show causes notices and also in the orders-in-appeal. Such refund shall be granted within a period of 45 days from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) of the CGST Act, Claimant/Appellant is eligible to get the refund of credit by E/87606/2019 cash except where unjust enrichment is alleged or established against the Appellant. The Appellant is also otherwise eligible to go for availment of transitional credit through filing required forms in Tran-I as per the order passed by the Hon'ble Supreme Court on 22nd July, 2022 but in view of the observation of this Tribunal read with Section 142(6)(a) of the CGST Act that such CENVAT Credit amount shall be paid to the Appellant in cash, it can't avail dual benefits once order of this Tribunal is duly complied by the Respondent Department by the closing date of the window. THE ORDER 10. The appeal is allowed and the order passed by the Commissioner of Central Tax, Central Excise & Service Tax (Appeals), Raigarh vide Order-in-Appeal No. MKK/466/RGD APP/2018-19 dated 07.02.2019 is hereby set aside and the Appellant is eligible to get refund of Rs.11,04,057/- paid against CVD and SAD which applicable interest, if any, within a period of two months of communication of this order." 10.3 The relevant paragraphs in the Final Order No. 42467/2021 dated 16.12.2021 in the case of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her amount paid under the existing law, shall be 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. Further it is very clear that as per sub-section (6)(a) of Section 142, every proceeding of appeal, review or reference relating to a claim for Cenvat credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit 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 subsection (2) of Section 11B of the Central Excise Act, 1944. Further I find that the appellant had already debited the entire amount in their Cenvat account and the said amount was debited under a bona fide belief that the cash refund would be sanctioned to them and the very fact that Cenvat credit was never disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ungta Mines Ltd. did not claim the service tax paid as CENVAT credit in their relevant ER-1 return and later in the TRAN-1 form brought in CGST Act, 2017. However, in the present case before the Tribunal, the appellants have paid the duty voluntarily and have claimed refund of the CENVAT credit eligible to them in terms of the provisions of CGST Act, 2017. Hence, I find that the case law cited by the learned AR does not have relevance to the present case in hand before the Tribunal. 10.6 Further, I find that the Order of the Tribunal in the case of Servo Packaging Limited (supra) relied upon by the learned AR, had come to a conclusion that the appellant could have availed the CENVAT credit of the payment of duty as prescribed in paragraph 4.50 of the HBP, but that would not give them any right to claim refund of such credit in cash with the onset of GST because CENVAT is an option available to an assessee to be exercised and the same cannot be enforced by the Tribunal at this stage. I find that this order has been passed by the Coordinate Bench of the Tribunal on 05.02.2020. However, after the Larger Bench decision in the case of Bosch Electrical Drive India Private Limited Vs. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsitional provisions :- (1) ******************* (2)******************* (3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be 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. ********************************" 11. In our view, Section 142(3) of the Act is very clear in as much as, it says " every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the Finance Act 1994 to allow cash refund, for accumulated CENVAT credit, Section 142(3), per se, cannot make it an eligible refund for effecting cash refund of CENVAT credit and thus the same is not admissible. I find that in these decisions the issues have not been examined in detail with respect to legislative provisions, as discussed herein above, and hence those decisions are distinguishable to this extent with the present case. 10.9 I also find that the co-ordinate Bench of the Tribunal in the case of Mayur Uniquoters Ltd., Jaipur & Others vide Final Order No. 58005- 58006/2024 dated 12.08.2024 has held that refund of interest on delayed payment of IGST is not entertainable as the interest is payable in terms of Section 50 of IGST Act, 2017, both for IGST on inputs and IGST on supplies made within India. The decision in the above-referred case has no relevance to the facts of the present case which deals with the refund of CENVAT Credit, and therefore, distinguishable. 10.10 In this regard, I find that Hon'ble Supreme Court have held in the case of Union of India Vs. Kamlakshi Finance Corporation Limited - 1991 (55) E.L.T. 433 (S.C.) that judicial discipline is require ..... 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