2022 (11) TMI 791 - AT - Central Excise

Refund of excise duty - pre and post GST era - duty paid on clearance of goods prior to 1.7.2017 and such goods had been returned by the buyer as defective after 1.7.2017, within a period of six months - HELD THAT - In the facts and circumstances of the present case, there is no dispute with regard to the identity of the goods cleared and the same goods have been returned back. Further, there is no dispute as to the duty paid nature of the goods under the provisions of the Central Excise Act. Further, it is found that the goods have been returned by a Public Sector entity, which is not registered under the provisions of the CGST Act. The Adjudicating Authority is directed to grant refund of the said amount of Rs.35,04,322/- with interest under Section 11 BB of the Central Excise Act, within a period of 45 days from the date of receipt of copy of this order - appeal allowed.

Summary

Issues:
Whether the appellant is entitled to a refund of excise duty paid on goods cleared before 1.7.2017, which were returned as defective after 1.7.2017 within six months.

Analysis:
1. The appellant, engaged in manufacturing final products falling under specific chapters of the Central Excise Tariff Act, paid excise duty on goods cleared before 1.7.2017, which were later returned as defective after 1.7.2017 within six months.
2. The appellant transitioned Cenvat credit involved in the returned goods by filing Form GST-TRAN-1 and also filed a refund claim of the excise duty amount in adherence to relevant provisions of the CGST Act, Excise Rules, and Excise Act.
3. Despite a departmental letter indicating the refund claim might be rejected due to double claiming, the appellant clarified the cautious filing and requested a hold on processing until verification of TRAN-1.
4. Subsequently, a Show Cause Notice was issued proposing to reject the refund claim based on the credit claimed in TRAN-1, leading to an Order-in-Original rejecting the claim, which was upheld in the Order-in-Appeal.
5. The appellant, believing TRAN-1 was verified, did not appeal the Order-in-Appeal until a later departmental letter and audit objection alleged excess credit availed in TRAN-1, prompting a Show Cause Notice to deny the credit.
6. The appellant then filed an appeal challenging the rejection of the refund claim, citing the denial of cenvat credit in TRAN-1 as the grounds for appeal.
7. Referring to a previous tribunal decision, the appellant argued for entitlement to the refund based on the nature of the goods and the absence of disputes regarding identity or duty paid status of the goods.
8. The Authorized Representative for Revenue supported the impugned order, leading to the Tribunal's decision considering the non-disputed identity and duty paid nature of the goods, allowing the appeal and directing the refund with interest within 45 days.
9. The Tribunal clarified that upon receiving the refund, the appellant would no longer be entitled to the credit under the GST Regime.

This comprehensive analysis covers the issues, facts, procedural history, arguments, and the final decision of the Tribunal regarding the entitlement to a refund of excise duty in the mentioned legal judgment.