2023 (2) TMI 1297 - AT - Central Excise

Refund in cash - refund claim in respect of the CVD and SAD paid for regularization of imports subsequent to introduction of GST regime - Shortfall in the fulfillment of export obligation - absence of specific legal provision under Section 142(3) of the CGST Act, 2017 read with Section 11B of the Central Excise Act, 1944 to grant refund - HELD THAT - Admittedly the CVD and SAD against which the appellant have filed these refund claims were paid during the months of April and May 2018. On the date of payment of duty there was no scheme of CENVAT Credit in vogue. Neither the amount for which the appellants are seeking the refund claim was in dispute before any authority, tribunal or court of law. The amounts sought as refund was paid by the appellant as directed by the DGFT for the redemption of the Advance Authorizations issued to the appellant. Admittedly appellant failed to fulfill the export obligations as per the advance authorizations issued to them within the stipulated time of eighteen months from the date of advance authorization. It is well evident that on the date of challan evidencing the payment of duty against which the appellants claim the CENVAT Credit, is after 1st July 2017, the date when the CENVAT Credit Scheme was rescinded. In absence of any scheme of CENVAT Credit Scheme on the date of payment of duty as above the claim to CENVAT Credit cannot be there. Indirectly by claiming that the they are not in position to claim CENVAT Credit, appellant has sought for the refund of the duties paid by them for nor non fulfillment of the obligation under advance authorization issued to them. Reliance can be placed in the case of DEVENDRA KUMAR VERSUS STATE OF UTTARANCHAL ORS. 2013 (7) TMI 1115 - SUPREME COURT where it was held that ' A person having done wrong cannot take advantage of his own wrong and plead bar of any law to frustrate the lawful trial by a competent Court. In such a case the legal maxim Nullus Commodum Capere Potest De Injuria Sua Propria applies. The persons violating the law cannot be permitted to urge that their offence cannot be subjected to inquiry, trial or investigation.' By the application of the principles as above well known in law and reiterated by the Hon ble Apex Court, the argument of the appellant cannot be accepted that the refund claim made by them shall be permissible in terms of Section 142 (3) of the CGST Act, 2017 read with Section 11 B of the Central Excise Act, 1944. The decision of Hon ble Punjab and Haryana High Court in case of 2020 (32) GSTL 726 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT as affirmed by Hon ble Supreme Court in UNION OF INDIA ORS. VERSUS ADFERT TECHNOLOGIES PVT. LTD. 2020 (3) TMI 188 - SC ORDER , is distinguishable as the said decisions is in case of non filing or incorrect filing of prescribed statutory form i.e. Tran-1 by the stipulated last date 27.12.2017, to carry forward the credit available in the book of accounts of the of the persons registered under Central Excise Act, 1944 or VAT Act. Hon ble High Court has directed that such person may be permitted to file or correct the Tran-1 already filed by them on or before 30th November 2019. The issue in the present appeal is not in respect of any such credit which was available in the book of accounts of the appellant on the appointed date i.e. 01.07.2017. Hence the said decision cannot be applied to the facts of present case. There are no merits in the submissions or the alternate submissions made by the appellant in support of their refund claim - appeal dismissed.

Summary

Issues Involved:
1. Eligibility for refund of CVD and SAD paid post-GST implementation.
2. Applicability of Section 142(3) of the CGST Act, 2017.
3. Interpretation of Rule 5 of the Cenvat Credit Rules, 2004.
4. Relevance of judicial precedents and prior judgments.

Detailed Analysis:

1. Eligibility for Refund of CVD and SAD Paid Post-GST Implementation:
The appellant, engaged in manufacturing Organic Surface Active Agents, paid customs duty including CVD and SAD due to shortfall in export obligations under the advance authorization scheme post-GST implementation. They claimed that they were entitled to avail Cenvat credit on these payments prior to GST and sought a refund under Section 142(3) of the CGST Act, 2017. However, the adjudicating authority rejected the claim, stating that there was no provision under Section 11B(2) of the Central Excise Act, 1944, for such refunds, and the appellate authority upheld this decision.

2. Applicability of Section 142(3) of the CGST Act, 2017:
The appellant argued that Section 142(3) of the CGST Act, 2017, provides for the refund of any amount of Cenvat credit, duty, tax, interest, or any other amount paid under the existing law to be disposed of in accordance with the provisions of existing law. They contended that since there was no provision for availing credit of CVD and SAD post-GST, they were entitled to a refund. The revenue, however, maintained that Section 142(3) mandates the sanction of refunds as per Section 11B(2) of the Central Excise Act, which does not provide for the refund of CVD and SAD paid due to non-fulfillment of export obligations.

3. Interpretation of Rule 5 of the Cenvat Credit Rules, 2004:
The impugned order highlighted that Rule 5 of the Cenvat Credit Rules, 2004, provides for the refund of Cenvat credit only in cases where credit has been taken and utilized in respect of final products or output services exported without payment of duty. The order concluded that in the absence of express provisions for granting refunds in other cases, the appellant's claim could not be entertained. The adjudicating authority emphasized that the CVD and SAD paid by the appellant due to non-fulfillment of export obligations did not qualify for a refund under Rule 5 read with Section 11B of the Central Excise Act.

4. Relevance of Judicial Precedents and Prior Judgments:
The appellant cited several judicial precedents supporting their claim for refunds, including decisions from CESTAT and High Courts. However, the impugned order dismissed these precedents, stating that the facts in those cases were distinguishable from the present case. The order relied on the decision of the Hon'ble High Court of Jharkhand in Rungta Mines, which held that Section 142(3) does not create any new right for refunds but saves existing rights under the old regime. It was concluded that the appellant's claim for a refund was not permissible as they did not have an existing right under the old law, and the duties were paid post-GST implementation.

Conclusion:
The appeal was dismissed, with the order affirming that the appellant was not entitled to a refund of CVD and SAD paid post-GST implementation under Section 142(3) of the CGST Act, 2017, read with Section 11B of the Central Excise Act, 1944. The order emphasized that refunds are only permissible in cases of export under Rule 5 of the Cenvat Credit Rules, 2004, and the appellant's situation did not meet this criterion. Judicial precedents cited by the appellant were found to be inapplicable to the facts of the case.