2018 (6) TMI 1343 - AT - Central Excise

Refund in cash - Whether the claim of the appellant for transfer of the set-off amount in their RG-23 account under Rule 57H(3) of erstwhile Central Excise Rules, 1944 is admissible or not? - Held that - The learned Commissioner (appeals) have misdirected himself as he has not been able to appreciate that the issue of Cenvat credit of the stock of inputs lying in stock was under Rule 57H(1) as amended by N/N. 28/91-CE - From a plain reading of the amended Rule 57H(1), it is evident that the Assistant Collector of Central Excise was required to allow credit of the duty on inputs lying in stock on 25th day of July, 1991 or inputs received in the factory on or after 25th day of July, 1991 upon obtaining the dated acknowledgement of the declaration made under the said rule. In view of Section 142(6)(a) of Central Goods & Service Tax Act which provides for cash refund in every proceeding of appeal, review or reference relating to 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. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Rule 57H of Central Excise Rules, 1944 regarding transfer of set-off amount to RG-23 account.
2. Admissibility of Cenvat credit for the appellant.
3. Application of Section 142(6)(a) of Central Goods & Service Tax Act for cash refund.

Issue 1 - Interpretation of Rule 57H:
The case involved the interpretation of Rule 57H of the Central Excise Rules, 1944, specifically regarding the transfer of the set-off amount to the RG-23 account. The Tribunal noted that the appellant had inputs of Mono Ethylene Glycol (MEG) in stock on 25/07/1991, and they had filed the necessary declaration under Rule 57H(1) as amended. The duty amount on the MEG was established. The Tribunal found that as per the amended Rule 57H(1), the Assistant Collector of Central Excise was mandated to allow credit for inputs in stock on or after 25/07/1991 upon obtaining the acknowledgment of the declaration. Since the appellant met these criteria, the denial of Modvat/Cenvat credit was deemed incorrect, and the impugned order was set aside.

Issue 2 - Admissibility of Cenvat Credit:
The Tribunal analyzed the eligibility of the appellant for Cenvat credit amounting to &8377; 12,63,909/- under dispute. It was established that the MEG in stock was available for use in the manufacture of Polyester Staple Fibre (PSF) on 25th July 1991, falling under the Modvat credit scheme. The Tribunal referenced Notification No.23/91-C.E.(N.T.) dated 25/07/1991, which specified the eligibility criteria for input MEG and the corresponding finished product. Consequently, the denial of Cenvat credit to the appellant was deemed incorrect, and the appellant was held entitled to the credit amount. Additionally, the Tribunal invoked Section 142(6)(a) of the Central Goods & Service Tax Act, which mandates cash refund for admissible credit claims. Therefore, the Central Excise Authority was directed to refund the amount of &8377; 12,63,909/- in cash with applicable interest.

Issue 3 - Application of Section 142(6)(a) of CGST Act:
In the context of the appellant's claim for Cenvat credit, the Tribunal referenced Section 142(6)(a) of the Central Goods & Service Tax Act. This section stipulates that in proceedings related to Cenvat credit claims initiated before, on, or after the appointed day under the existing law, any admissible credit amount should be refunded to the claimant in cash. The Tribunal's decision to allow the appeal and grant the appellant the entitled Cenvat credit of &8377; 12,63,909/- was in alignment with the provisions of Section 142(6)(a) of the CGST Act, ensuring the appellant's right to cash refund for the approved credit amount.

This detailed analysis of the judgment showcases the Tribunal's interpretation of Rule 57H, determination of Cenvat credit admissibility, and application of relevant provisions under the CGST Act for cash refund, providing a comprehensive understanding of the legal aspects addressed in the case.