2021 (9) TMI 638 - AT - Central Excise

Refund claim for unutilised cenvat credit - appellant took re-credit of the rejected amount of refund and thereafter, again filed the refund claims - entitlement to re-credit under the repealed provisions of N/N. 27/2012-CE - Applicability of first Proviso to Section 142(3) of the CGST Act, 2017 - HELD THAT - The provisions of Section 142(3) First Proviso read with Section 142(6)(a) along with the proviso clearly provides that the existing pending claims of an assessee under the repealed Central Excise Act or Service Act provisions shall be decided in accordance with erstwhile Act, and it further provides that if any claim of refund is rejected, the same shall lapse. The present appeals are also bad under the principles of res judicata, as the same issue of refund attained finality on passing of the order by the Commissioner (Appeals) in the year 2018 as the appellant chose not to file any further appeal before the higher forum. Further, the subordinate legislation is effective or in force till the date of Parent Act only. As the Parent Act in this case is repealed w.e.f. 1.7.2017, when the CGST provisions, came into force. Accordingly, the appellant have erred in law taking re-credit of the rejected refund amount in the year 2018 and thereafter they have again filed claim for the rejected amount of refund. There are no merits in the appeal - appeal dismissed.

Summary

Issues:
Rejection of refund claim for unutilised cenvat credit under Rule 5 of CCR read with Notification No.27/2012-CE (NT), lapse of refund claims under the first Proviso to Section 142(3) of the CGST Act, 2017, applicability of res judicata principle on refund claims.

Analysis:
The judgment addresses three appeals related to the rejection of refund claims for unutilised cenvat credit under Rule 5 of CCR read with Notification No.27/2012-CE (NT). The refund claims were initially rejected by the Adjudicating Authority through different orders-in-original. Subsequently, the appellant appealed before the Commissioner (Appeals) in 2018, which were also rejected. The appellant, under erroneous advice, took re-credit of the rejected refund amount and refiled the claims before the Adjudicating Authority, leading to further rejection. The Commissioner (Appeals) held that despite being entitled to take re-credit under the repealed provisions of Notification No.27/2012-CE, the appellant could not claim the refund amount again due to it lapsing under the first Proviso to Section 142(3) of the CGST Act, 2017.

Upon hearing the parties, the Tribunal analyzed the provisions of Section 142(3) First Proviso along with Section 142(6)(a) of the CGST Act, 2017. The Tribunal concluded that the pending claims of an assessee under the repealed Central Excise Act or Service Act provisions should be decided as per the erstwhile Act. If any refund claim is rejected, it shall lapse. The Tribunal also applied the principle of res judicata, stating that the issue of refund had attained finality with the Commissioner (Appeals) order in 2018, as the appellant did not further appeal to a higher forum. The Tribunal emphasized that subordinate legislation remains effective until the Parent Act's repeal date. As the Parent Act was repealed with the introduction of the CGST provisions in 2017, the appellant's re-credit of the rejected refund amount in 2018 and subsequent re-filing of the claim were deemed erroneous.

In conclusion, the Tribunal found no merit in the appeals and dismissed them, citing the lapse of refund claims under the first Proviso to Section 142(3) of the CGST Act, 2017, and the application of the res judicata principle. The judgment highlights the importance of adhering to legal procedures and the implications of taking actions based on incorrect advice in matters of refund claims and re-credits.