2022 (3) TMI 800 - AT - Central Excise

Refund of unutilised CENVAT Credit - whether cenvat credit rightly availed and the same is lying in their books un-utilised or not? - applicability of Rule 6(1), (2) and (3) of Cenvat Credit Rules - HELD THAT - Admittedly appellant have manufactured dutiable finished goods, which have been cleared without payment of duty under exemption Notification No. 12/2012-CE to Mega Power Project awarded to a developer Larson Toubro through tariff based competitive bidding. Accordingly, in view of Rule 6(6)(vii), the provision of sub-rule (1), (2), (3) and (4) of Rule 6 are not applicable in the case of the appellant. Hence, appellant have rightly taken cenvat credit. Once it is held that the appellant has rightly taken cenvat credit and the same is lying in their books un-utilised as on 30.06.2017, when the provisions of CGST Act (GST regime) was implemented w.e.f. 01.07.2017, and thus if the appellant has not taken the un-utilised cenvat credit to the GST regime by filing form TRAN-1, they are eligible to refund of the un-utilised credit in terms of the transitional provision under Section 142(2) and (6) of the CGST Act - Admittedly, in the facts of the present case, appellant has not taken the benefit of transactional provision for transfer of un-utilised cenvat credit to the GST regime. The appellant is entitled to refund of the un utilised cenvat credit - appeal allowed - decided in favor of appellant.

Summary

Issues:
Rectification of mistake in final order, Transfer of unutilized credit, Disallowance of cenvat credit, Penalty imposition, Appeal before Tribunal, Refund of unutilized credit, Jurisdictional error, Eligibility for cenvat credit, Transitional provisions under CGST Act.

Rectification of Mistake in Final Order:
The appellant and the revenue filed applications for rectification of mistake in the final order dated 01.09.2020. The Tribunal noted the admitted facts regarding the transfer of unutilized credit and the disallowance of cenvat credit by the adjudicating authority. The Tribunal found errors in the original order and directed a remand for further examination by the Central Excise Authority over the Baddi Unit to determine the shifting of the Delhi unit and the transfer of inputs.

Disallowed Cenvat Credit and Penalty Imposition:
The Commissioner (Appeals) had upheld the disallowance of cenvat credit but set aside the penalty imposed under Rule 15, observing no suppression or misinformation by the appellant. The Tribunal found that the appellant had maintained proper records of transactions and allowed the appeal by remanding the case for further findings on the shifting of units and transfer of goods.

Refund of Unutilized Credit and Transitional Provisions under CGST Act:
The appellant sought a refund of unutilized credit in cash under Rule 6(6)(vii) of the Cenvat Credit Rules, as goods were cleared under exemption for a Mega Power Project. The Tribunal held that the appellant was entitled to the refund as they had not transitioned the credit to the GST regime. The Tribunal directed the Adjudicating Authority to disburse the unutilized credit amount with interest within 60 days.

Jurisdictional Error and Eligibility for Cenvat Credit:
A miscellaneous application by the revenue pointed out a jurisdictional error in assigning the matter to the Baddi Unit instead of the Delhi unit. The Tribunal found an error in not addressing the eligibility for cenvat credit under Rule 6(1), (2), and (3) of the Cenvat Credit Rules. The Tribunal corrected the errors and allowed the appellant's application for refund while disposing of the revenue's application accordingly.

This judgment highlights the importance of proper record-keeping, eligibility criteria for availing credits, and adherence to transitional provisions under the CGST Act. The Tribunal's decision provides clarity on the refund of unutilized credits and corrects jurisdictional and legal errors in the original order.