2023 (5) TMI 386 - HC - Central Excise

Rebate claim - erroneous sanction in favour of the opposite party, for which the petitioner has approached this Court claiming for re-crediting it in the Cenvat Credit ledger - Section 142 (3) of the CGST Act, 2017 - HELD THAT - The Revision application was filed on the grounds that it is settled law that the rebate of duty was available only in respect of duty paid on FOB value and not any value over and above the FOB value and that additional amount of Rs. 4,23,89,327/- sanctioned erroneously by the Original Authority was to be allowed not as a amount of refund but as a reversal entry because refund/rebate is not admissible and that as per Section 142 (3) of the CGST Act, 2017, every claim for refund filed after the appointed date, i.e. 01.07.2017, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to the Applicant shall be paid in cash and that Commissioner (Appeals) has erred in applying the aforesaid Section 142 (3) since the disputed amount involved herein relates to the re-credit and not to refund in cash and, as such, the same has to lapse. Needless to say, the Commissioner (Appeals) while considering the case also taken into consideration the provisions contained under Section 142 (3) of the CGST Act, 2017 and held that since the application for rebate was filed after the appointed date, i.e., 01.07.2017, the amount which earlier would have been allowed to be refunded by way of re-credit, should now be refunded in cash as per the provisions of said Section 142(3). This Court finds that there is no infirmity in the order impugned, which requires interference by this Court - Petition dismissed.

Summary

Issues:
The judgment involves the quashing of an order passed by the Additional Secretary to the Government of India regarding the sanctioning of rebate on Central Excise duty and the subsequent refund dispute.

Issue 1: Rebate Sanctioning and Refund Dispute
The petitioner filed a writ petition seeking to quash the order sanctioning rebate on Central Excise duty. The petitioner contended that a balance amount had been erroneously sanctioned in cash instead of re-crediting it in the Cenvat Credit ledger. The Original Authority sanctioned the rebate, but the petitioner department argued that the rebate should only be on the FOB value basis. The Commissioner (Appeals) set aside the original order and confirmed the demand for the erroneously refunded amount, imposing penalties. The Revisional Authority held that the rebate was sanctioned beyond the prescribed law and should have been re-credited instead of refunded in cash. The Commissioner (Appeals) held that the amount should be refunded in cash as per Section 142(3) of the CGST Act, 2017, which was in line with a judgment of the Gujarat High Court.

Issue 2: Legal Interpretation
The Commissioner (Appeals) considered the provisions under Section 142(3) of the CGST Act, 2017, and held that the amount, which would have been allowed to be refunded by re-credit, should now be refunded in cash due to the application for rebate being filed after 01.07.2017. The judgment of the Gujarat High Court in a similar case supported this interpretation. The Court found that the order impugned did not have any infirmity that required interference.

In conclusion, the writ petition was dismissed, upholding the decision to refund the disputed amount in cash as per the provisions of the law and previous legal interpretations.