2022 (3) TMI 49 - AT - Service Tax

Refund of CENVAT Credit - rejection on the ground of time limitation - whether refund arises by way of self assessment the same is not entertainable as Section 142(8) sub-Clause b provide for refund arising pursuing to assessment observing that assessment does not include self-assessment? - principles of unjust enrichment - HELD THAT - On the issue whether assessment includes self-assessment, learned Counsel has drawn attention to Rule 2(b) of Central Excise Rules, 2002, wherein it have been specifically provided- assessment includes self-assessment of duty made by the assessee and provisional assessment under Rule 7. Thus, the first objection for refund is bad and against the provisions of law. Time Limitation - HELD THAT - Section 142(3) of CGST Act, provides that after the appointed day (30 th June 2017) every claim for refund of any duty, tax, interest, etc., under the existing law shall be disposed of in accordance with the provisions of the existing law and any amount eventually accruing to him (assessee) shall be paid in cash, notwithstanding, anything to the contrary contained under the provisions of existing law other than the provisions of sub-section 2 of Section 11B (unjust enrichment) of Central Excise Act - Further, again 142(8)(b) also similarly provides for disbursement of any refund arising pursuant to assessment or adjudication proceedings, except for the provisions of Section 11B(2) of Central Excise Act, which deals with unjust enrichment. Admittedly, in the facts of the present case, no limitation is applicable as provided under Section 11B (one year from the relevant date), due to overriding effect of CGST Act. Accordingly, the appellant is entitled to refund under the provisions of Section 142(3) r/w 142(8) (b) of the CGST Act r/w the erstwhile provisions of Central Excise Act and the Cenvat Credit Rules. The adjudicating authority is directed to disburse the amount of refund alongwith interest under the provisions of Section 11BB of the Central Excise Act - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the refund of Cenvat credit filed on 07th March 2019, as on 30th June 2017, was rightly rejected on the ground of limitation and self-assessment.

Analysis:
The issue in this appeal revolved around the rejection of a Cenvat credit refund filed after the appointed day of 30th June 2017. The primary contention was whether the refund was rightfully rejected based on limitation and the nature of the assessment. The first objection raised was regarding self-assessment. The appellant argued that Rule 2(b) of the Central Excise Rules, 2002, explicitly includes self-assessment within the definition of assessment. Therefore, the objection based on self-assessment was deemed invalid and contrary to the law.

Moving on to the second objection concerning limitation, the provisions of Section 142(3) and 142(8)(b) were examined. Section 142(3) stipulates that every claim for refund post the appointed day must be handled in accordance with existing laws, with the eventual amount payable in cash. It further addresses the lapsing of rejected refund claims and restrictions on refund where the balance has been carried forward. Section 142(8)(b) specifically deals with the refund arising from assessment or adjudication proceedings, emphasizing the disbursement of such refunds. Notably, the provisions of Section 11B regarding unjust enrichment are highlighted in both sections.

The judgment emphasized that the limitations prescribed under Section 11B did not apply in this case due to the overriding effect of the CGST Act. Consequently, the appellant was found entitled to the refund under the combined provisions of Section 142(3) read with 142(8)(b) of the CGST Act, in conjunction with the erstwhile regulations of the Central Excise Act and the Cenvat Credit Rules. As a result, the appeal was allowed, the impugned order was set aside, and the adjudicating authority was directed to disburse the refund amount with interest under the provisions of Section 11BB of the Central Excise Act. Additionally, a strict timeline of 45 days was imposed for the refund disbursement from the date of receipt or service of the order on the adjudicating authority.