2022 (3) TMI 188 - AT - Central Excise

Refund of CENVAT Credit - input services - Outward GTA - rejection of claim on the ground that once the appellant has voluntarily reversed the Cenvat credit they cannot claim the refund - HELD THAT - Even though the appellant has paid the amount on observation of the audit team but subsequently they realized that the amount was not payable, accordingly, they had filed a refund claim. The refund claim should have been decided on merit by the Adjudicating Authority. The appellant have the statutory right that the benefits due to them can be claimed at any stage and the same need to be disposed in accordance with law on merit. As regard merit of the case the fact that the sale of goods in relation to which they incurred the expenditure of outward transportation is on FOR sale and the freight amount is included in the price of the goods on which excise duty was paid. This Tribunal Considering the very same fact, allowed the Cenavt credit in the case of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1487 - CESTAT AHMEDABAD and M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1488 - CESTAT AHMEDABAD and the same was upheld by the Hon ble Jurisdictional High Court of Gujarat. The appellant is entitled for the Cenvat credit in respect of the Outward Transportation and consequently they are also entitled for the refund of the same as the same was reversed by them - Appeal allowed.

Summary

Issues:
Refund claim of Cenvat credit on Outward GTA rejected by Adjudicating Authority based on voluntary reversal of credit and merit of the claim.

Analysis:
The appeal was filed against the Commissioner (Appeals) order upholding the rejection of the refund claim of Cenvat credit on Outward GTA. The appellant initially reversed the credit on audit objection but later realized their entitlement to the credit based on the nature of the sale. The Adjudicating Authority rejected the claim stating that voluntary reversal precludes refund. The Commissioner (Appeals) upheld this decision, citing the Ultratech Cement Ltd case. The appellant argued that the claim should not be rejected solely on the grounds of voluntary payment.

Upon review, the Tribunal found that the appellant had paid the amount initially due to the audit team's observation, but later discovered it was not owed and filed a refund claim. The Tribunal emphasized the appellant's statutory right to claim benefits at any stage, which should be decided on merit. The Tribunal noted that the sale of goods, in this case, involved outward transportation costs included in the price of goods on which excise duty was paid, making the appellant eligible for Cenvat credit, as established in previous cases upheld by the High Court.

Regarding the Commissioner's reliance on the Ultratech Cement case, the Tribunal distinguished it based on a board circular and previous judgments in the Ultratech Cement Ltd and Sanghi Industries cases. Consequently, the Tribunal ruled in favor of the appellant, affirming their entitlement to Cenvat credit on Outward Transportation and the corresponding refund, as the credit was voluntarily reversed by them.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with consequential relief for the appellant.