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TMI Blog2025 (5) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant, I find that- a. The appellant has not fulfilled export obligation in respect of Advance Authorisation Nos. 0510397229 dated 07/01/2016, 0510399240 dated 27/06/2016 and 0510399241 dated 27/06/2016. b. Accordingly, the appellant had paid BCD, CVD, SAD & CESS along with applicable interest vide challan Sr. No. 006856, 006853, 006854, 006855 all dated 22/10/2018 and No. 2368 and 2369 both dated 28/09/2018. c. As per section 142 (6)(b) of the CGST Act, 2017, the amount paid by the appellant due to non-fulfillment of their obligations for exports made under Advance Authorisation is not admissible as Input Tax Credit. Thus, the appellant is not entitled to refund of the Customs duties (CVD & SAD). d. Payments of BCD, CVD, SAD & CESS made on account of non fulfillment of export obligation against Advance Authorizations are not admissible as valid Input Tax Credit under the provisions of Rule 9(1) of the CENVAT Credit Rules, 2004 as said duties were paid by the appellant on account of contraventions of the provisions of FTP as well as contravention of Customs Law. e. In similar issue in the matter of M/s. Servo Packaging Ltd. vs. Commissioner of GST and C Ex. Puducherr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to refund. 6. The Assistant Commissioner, by order dated 21.08.2019, rejected the refund claim on the following grounds: (i) The appellant did not produce any evidence that it had paid customs duties voluntarily. (ii) The refund is not eligible under rule 9(1) of CENVAT Credit Rules, 2004 [the 2004 Credit Rules] on account of non-levy, short levy by reason of fraud, collusion, wilful misstatement with intent to evade duty, as it was alleged that the appellant was fully aware of non-fulfilling of export obligation. (iii) The transitional provisions under CGST Act do not talk about refund of any payment made after 01.07.2017 to discharge liability of existing laws. 7. The appellant filed an appeal before the Commissioner (Appeals) against the said order dated 21.08.2019 on the ground that the case falls under section 142(6)(a) of the CGST Act and that the appellant had voluntarily paid customs duties foregone at the time of import of inputs. An affidavit was also filed stating that CVD and SAD were paid voluntarily. 8. The Commissioner (Appeals), by order dated 09.12.2020, remanded the matter to the adjudicating authority with a direction to make necessary inquiry regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 15. The Commissioner (Appeals), as would be seen from paragraph 8 of the order dated 25.01.2023 reproduced above, has placed reliance upon section 142(6)(b) of the CGST Act and rule 9(1) of the Credit Rules as also to the decision of the Tribunal in Servo Packaging for rejecting the refund claim. 16. The issue that arises for consideration in this appeal is as to whether the appellant is entitled to claim refund of CENVAT credit in cash on the amount of CVD and SAD paid under the existing law under the provisions of section 142(3) of the CGST Act. 17. In order to appreciate this issue, it would be appropriate to refer to the relevant provisions. 18. The term "assessment‟ has been defined in section 2(11) of the CGST Act and it is as follows: "2(11) "assessment" means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment" 19. The term "existing law‟ is defined in section 2(48) of the CGST Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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. ***** (6) (a) 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 sub-section (2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the appointed day under the said amended Act or repealed Acts and such proceedings shall be continued under the said amended Act or repealed Acts as if this Act had not come into force and the said Acts had not been amended or repealed." 26. The CENVAT Rules were made under section 37 of the Excise Act and section 94 of the Finance Act. Under rule 4(7), CENVAT credit in respect of input service was allowed, on or after the day on which the invoice, bill or, as the case may be, challan referred to in rule 9 was received. Under rule 9(1)(e) of the CENVAT Rules, credit can be taken on the basis of a challan evidencing payment of service tax, by the service recipient as the person liable to pay service tax. Section 173 of the CGST Act provides that save as otherwise provided in this Act, Chapter V of the Finance Act shall be omitted. Section 174(1) of the CGST Act further provides that save as otherwise provided in this Act, on and from the date of commencement of this Act i.e. 01.07.2017, the Excise Act and some other Acts referred to are repealed. 27. It is in the light of the aforesaid factual and legal position that the contentions that have been advanced by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Provisions. Sub-section (3) provides that every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the 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. However, 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 the CGST Act. 35. Thus, under sub-section (3) of section 142, the claim for refund of any amount of CENVAT credit has to be disposed of in accordance with the provisions of the existing law. "Existing law‟ under section 2(48) of the CGST Act means any law relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of the CGST Act. The existing law, therefore, would be Chapter V of the Finance Act and the Central Excise Act. 36. Section 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o force w.e.f. 01.07.2017. The appellant, therefore, could not claim the transition of the input credit under section 140 of the CGST Act. The appellant could not also avail CENVAT credit under the CENVAT Rules as they were no longer in force after the introduction of the CGST Act. 17. It is for this reason that the appellant filed an application under section 142(3) of the CGST Act claiming refund of the amount of CENVAT credit paid by the appellant. This claim of the appellant was rejected by the Deputy Commissioner by the order dated 24.04.2019 and the appeal filed by the appellant before the Commissioner (Appeals) was also rejected by the order dated 21.09.2019. xxxxxxxxxxx 49. In the present case, the service tax was paid under the provisions of Chapter V of the Finance Act and refund was claimed under sub-section (3) of section 142 of the CGST Act, under which the claim was required to be disposed of in accordance with the provisions of the existing law. Therefore, even if the service tax had been deposited by the appellant after 01.01.2017, nonetheless the refund of any amount of the CENVAT credit could be claimed only under sub-section (3) of section 142 of the CGST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant was not in position to avail the Cenvat credit, therefore consequently even refund of the amount which is not cenvatable could not have been claimed. We find that the appellant have paid the CVD and SAD for the period prior to 01.07.2017 even though the payment was made subsequent to 01.07.2017. Therefore, since the duty is paid by the appellant are for the period when the Cenvat credit Rules was existing, the appellant were entitled for Cenvat credit during period prior to 01.07.2017. In CGST Act to deal with situation of the present case, special provision was made under Section 142(3) whereby when the assessee is not in a position to avail the Cenvat credit or utilize the same due to effect of GST regime from 01.07.2017 refund provision was enacted which specifically deals with the situation of refund of amount which is cenvatable as per existing law i.e. Central Excise Act, 1944 and Rules made thereunder. In the present case, the refund was made under the existing law i.e. section 11B of Central Excise Act, 1944 accordingly, the refund of SAD/CVD paid by the appellant which was cenvatable at the time when the said duty was payable, It is clearly eligible for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CENVAT credit in cash under the provision of section 142(3) of the CGST Act even though Shakti Pumps had paid CVD and SAD post implementation of the CGST Act and in terms of the 2004 Credit Rules, as applicable prior to 01.07.2017, Shakti Pumps was entitled to claim CENVAT credit of CVD and SAD paid on imports. The appellant would, therefore, be entitled to refund in cash CENVAT credit of the amount of CVD and SAD paid after 01.07.2017. 33. Learned authorized representative appearing for the department has placed reliance upon a judgment of the Jharkhand High Court in Rungta Mines. The relevant paragraphs of the judgment of the Jharkhand High Court are reproduced below: "41. Thus, Section 142(3) of CGST Act clearly provides that refund application with respect of any amount relating to Cenvat credit, duty, tax, interest or any other amount paid under the existing law is to be disposed of in accordance with the provisions of existing law and if any such amount accrues the same shall be paid in cash. Such right to refund in cash has been conferred notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed the amount of service tax on 'port service' as credit in the ST-3 returns to which it was admittedly not entitled to as it was an assessee under service tax only on reverse charge mechanism and admittedly the "port services" availed by the writ petitioner was not covered under reverse charge mechanism. Thus, it was found as a fact that the writ petitioner had not only illegally taken credit of service tax on "port services" as credit in the ST-3 returns, but had filed an application for refund of the same under section 142(3) of the CGST Act, which was not permissible in law. This decision of the Jharkhand High Court in Rungta Mines would, therefore, not come to the aid of the department. 35. Learned authorized representative appearing for the department has also relied upon the two decisions, each rendered by a learned Member of the Tribunal, in United Seamless Tubular and M/s. JSW Steel Ltd. vs. Commissioner of Central Tax & Central Excise-Excise Appeal No. 20135 of 2021 decided on 31.05.2024 . Both these decisions run contrary to the decision of a Larger Bench of the Tribunal in M/s. Bosch Electrical Drive India Private Limited vs. Commissioner of Central Tax, Chennai -( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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