2020 (2) TMI 623 - AT - Central Excise

CENVAT Credit - duty paying documents - endorsed invoices - eligible documents for the purpose of availment of Cenvat Credit or not - HELD THAT - Admittedly an amount of ₹ 4,50,000/- was debited by th assessee from their Cenvat Credit account, during the pendency of the appeal. Whether such an accumulated credit could have been used by the assessee, during the relevant period or not, is not clear from the facts of the case. In other words if on account of such debit, which was on the basis of the objection raised by the revenue, the appellant was compelled to pay the duty, during the relevant period from their P/L account then the said refund of debited credit would be available to the assessee in cash - Inasmuch as, the said facts are not available on record, it is deemed fit to set aside the impugned order and remand the matter to Original Adjudicating Authority for verification of the said factual position. Appeal allowed by way of remand.

Summary

Issues:
1. Availment of Cenvat Credit based on endorsed invoices.
2. Refund claim of deposited amount.
3. Refund of debited Cenvat Credit amount.
4. Applicability of GST transitional credit.

Analysis:

1. The appellants availed Cenvat Credit based on endorsed invoices for cooling tower components manufactured on job work basis. Revenue objected to this, leading to a legal dispute. The High Court ruled in favor of the assessee, allowing the Cenvat Credit. However, the Revenue contended that a portion of the deposited amount should be credited back to the Cenvat Credit account instead of being refunded in cash.

2. The appellant had deposited an amount during the litigation, which was later sanctioned for refund by the Assistant Commissioner. However, a portion of the deposited amount was debited from the Cenvat Credit account. The Commissioner (Appeals) modified the order, directing that the debited amount should be credited back to the Cenvat Credit account only, based on previous Tribunal decisions disallowing cash refunds for excess accumulated credit.

3. The Tribunal reviewed the case and found ambiguity regarding the utilization of the debited credit during the relevant period. If the appellant had to pay duty from their Profit and Loss account due to the debit, the refunded credit should be available in cash. As the facts on this aspect were unclear, the Tribunal set aside the order and remanded the matter to the Original Adjudicating Authority for further verification.

4. The appellant's advocate highlighted the provisions of the GST regime regarding the carry forward of accumulated credits under section 142(3) of the Central Goods and Services Tax Act, 2017. The Tribunal directed the Original Adjudicating Authority to consider this aspect along with the precedent set by a previous case related to transitional credits under GST.

In conclusion, the appeal was allowed by way of remand for further examination and clarification on the issues raised regarding Cenvat Credit, refund claims, debited credit, and the implications of the GST transitional credit provisions.