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2020 (3) TMI 837 - AT - Central Excise100% EOU - refund of unutilized balance of cesses in cash - whether the appellant is entitled to cash refund of cesses in respect of which they had a balance in CENVAT credit account which they could not utilise on 01.07.2017? - HELD THAT - The provisions of CGST allow them to carry forward the same as input tax credit under the CGST. However, the CGST Act does not allow them to carry forward the cesses as input tax credit. The appellant s case is that as a result they will be losing the credit balance and therefore, the same must be paid to them in cash. There is no provision in the CENVAT Credit Rules 2004 or the Central Excise Act 1944 to allow cash refund of cesses lying in balance in the CENVAT Credit account on the ground that appellant was not able to use the same. Appeal dismissed - decided against appellant.
Issues:
1. Eligibility for refund of Education Cess and Secondary and Higher Education Cess under the CGST Act, 2017. 2. Entitlement to cash refund of cesses in CENVAT credit account post-implementation of CGST Act. Issue 1: Eligibility for refund of Education Cess and Secondary and Higher Education Cess under the CGST Act, 2017: The appellant, a manufacturer of pharmaceuticals and a 100% EOU, sought a refund of unutilized balance of cesses under CENVAT Credit Rules 2004 post the introduction of the CGST Act. The appellate authority rejected the refund claim, emphasizing that Education Cess and Secondary and Higher Education Cess are not meant to be transitioned to the electronic credit register in the GSTN due to amendments in the definition of 'eligible duties and taxes' under Section 140 of the CGST Act. The authority highlighted that cesses are excluded from eligible duties and taxes for GST utilization. The appellant's argument that the cesses should be refunded under Section 11B of the Central Excise Act, 1944 was dismissed as there was no provision mandating such refund under the CENVAT Credit Rules or Section 11B. The authority upheld the original order rejecting the refund claim, stating that transitional provisions do not cover refund of CENVAT Credit not eligible for transition into the GST regime. Issue 2: Entitlement to cash refund of cesses in CENVAT credit account post-implementation of CGST Act: The appellant contended that they should receive a cash refund for cesses in their CENVAT credit account that could not be utilized post the implementation of the CGST Act. However, the Tribunal found no provision in the CENVAT Credit Rules 2004 or the Central Excise Act 1944 allowing cash refund of such cesses. Referring to a judgment by the Hon'ble High Court of Bombay in a similar case, the Tribunal concluded that cash refund was not permissible under the proviso to section 11B(2) of the Central Excise Act, 1944 when an assessee is unable to utilize credit on inputs. The Tribunal, in alignment with the Mumbai High Court's decision, rejected the appeal, upholding that there was no legal provision for the requested refund. In conclusion, the Tribunal upheld the impugned order, rejecting the appeal on both issues. The appellant's claims for refund of Education Cess and Secondary and Higher Education Cess under the CGST Act, 2017, and for cash refund of cesses in their CENVAT credit account post-CGST Act implementation were dismissed based on the lack of legal provisions supporting such refunds.
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