2022 (5) TMI 1116 - AT - Central Excise

Refund of CENVAT Credit - education cess and secondary higher education cess paid on total custom duty when both the duty were exempted against the CVD - only ground for claim of refund of the appellant is that the period of taking credit as beyond the normal period - N/N. 13/2012-Cus and 14/2012-Cus dated 17.03.2012 - HELD THAT - In the present case it is not a case of demand but the appellant have paid the amount of cenvat credit accepting their mistake that the cenvat credit in respect of CVD of the custom duty is not admissible. This issue was raised by the audit and consequently the appellant have paid the amount. It is pertinent to note that the issue of non availability of the cenvat credit has been decided by this Tribunal in the case of NIRMA LIMITED, SAURASHTRA CHEMICALS DIVISION OF NIRMA LTD, MAC PAPER MILLS, ACULIFE HEALTHCARE P LTD, NILKANTH SPECIFIC FAMILY TRUST VERSUS C.C.E. S.T. -BHAVNAGAR AND C.C.E. S.T. -VADODARA-I VERSUS THERMAX LTD 2018 (2) TMI 476 - CESTAT AHMEDABAD . As per this judgment the appellant was not entitled for cenvat credit. Therefore as per the merit of the case the appeallant was not entitled for the cenvat credit. Accordingly, they have reversed the credit. It is also important to note that in the present case there is no demand involved the issue of extended period can be decided only in case of demand not in the case of the refund. The refund needs to be decided only on the merit whether the appellant was entitled for cenvat credit or otherwise. The demand notice issued under Section 11A which prescribes the time limit which is not the case hear. Therefore, the decision of the tribunal in the case of Nirma LTD. relied upon by the appellant is of no help to the appellant for the reason that the same related to demand of recovery of wrongly availed the cenvat credit. Whereas in the present case appellant have filed the refund claim and the refund was rightly decided on the merit that whether the appellant is entitled for cenvat credit or not. There are no infirmity in impugned order rejecting the refund - appeal dismissed.

Summary

Issues:
Entitlement to Cenvat Credit for education cess and secondary higher education cess paid on total custom duty when both duties were exempted against CVD.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD dealt with the issue of entitlement to Cenvat Credit for education cess and secondary higher education cess paid on total custom duty when both duties were exempted against CVD. The appellant initially claimed the credit but later reversed it due to an audit objection. Subsequently, refund applications were filed, but Show Cause Notices proposing denial of the refund were issued. The Assistant Commissioner and the Commissioner (Appeals) denied the refund claims on merit, leading to the appellant filing appeals before the Tribunal.

The appellant's counsel argued that a previous judgment in the case of NIRMA LTD. Vs. COMMISSIONER OF CE & ST, BHAVNAGAR held that the demand for the extended period of availing Cenvat Credit was not maintainable. The counsel contended that since the appellant availed the credit beyond the normal period, they were entitled to the refund. However, the revenue's representative disagreed, stating that the case law cited was not applicable as the present situation involved the appellant voluntarily paying the credit upon realizing their ineligibility for the refund.

The Tribunal analyzed the submissions and records, emphasizing that the issue was not about a demand but the appellant acknowledging their mistake and voluntarily paying the credit. Referring to the Nirma Ltd. case, the Tribunal concluded that the appellant was not entitled to the Cenvat Credit, leading to the reversal of the credit. The Tribunal clarified that the issue of the extended period applied to demands, not refunds, and upheld the denial of the refund based on the merit of the case. The Tribunal found no fault in the impugned order rejecting the refund, ultimately dismissing the appeals.

In conclusion, the Tribunal's decision centered on the appellant's ineligibility for the Cenvat Credit, leading to the reversal of the credit and the denial of the refund claim based on the merit of the case. The judgment highlighted the distinction between demands and refunds concerning the time limit for claiming Cenvat Credit, ultimately upholding the denial of the refund.