2024 (5) TMI 767 - AT - Central Excise

Refund of CVD and SAD in respect of payment of custom duty for regularizing excess import under advance authorization prior to introduction of GST regime - duty liability was finalized and paid after the introduction of GST - CVD and SAD was paid by the appellant on their own suo moto in order to regularize excess import qua export obligation fulfillment - HELD THAT - From the reading of the Section 142 (3) of CGST 2017 it is clear that an assessee who is eligible for cenvat credit and unable to take the credit due to CGST regime after 01.07.2017 shall be eligible for the cash refund. In the present case the CVD and SAD was paid which is admissible as cenvat credit to the appellants under the existing law i.e. Cenvat Credit Rules 2004. Secondly the said amount is refundable to the appellants. As regard the issue that whether the appellant s claim of CVD and SAD is hit by Rule 9 (1) (b) or(bb) of Cenvat Credit Rules 2004 it is found that firstly there is no demand notice in respect of CVD and SAD which was paid by the appellants on their own and also no adjudication as regard the suppression fact therefore in absence of any charge by way of show cause notice or adjudication thereof the allegation of suppression of fact only to invoke Rule 9 (1) (b) or(bb) of Cenvat Credit Rules 2004 is on assumption and presumption which cannot be accepted. In the present case the advance license is on record and since there was excess import as compared to the eligible under advance license the appellant have discharged the duty of CVD and SAD Suo moto for which no offence was made out by the department. Therefore in this fact no suppression of fact is involved. Consequently penal provision under Rule 9 (1) (b) or (bb) shall also not apply. It is found that except the legal issue there is no discussion about the fact documents and verification thereof hence the matter needs to be remanded for this limited purpose for processing the fund claim of the appellant - the impugned order is set aside - appeals are allowed by way of remand to the Adjudicating Authority.

Summary

Issues involved:
The issue involved in the present case is whether the appellant is eligible to claim refund of CVD and SAD in respect of payment of custom duty for regularizing excess import under advance authorization prior to the introduction of GST regime but the duty liability was finalized and paid after the introduction of GST.

Details of the Judgment:

Issue 1: Eligibility for refund of CVD and SAD under CGST Act, 2017
The appellant claimed refund under Section 142(3) of CGST Act, 2017 for the payment of CVD and SAD, contending that even though the duty was paid after 01.07.2017, it pertains to the period prior to that date when the appellant was eligible for cenvat credit. The lower authorities rejected the claim, citing ineligibility post-GST regime. However, the appellant argued that the duty was paid on their own initiative to regularize excess import, making them eligible for cenvat credit and refund under Section 142(3). The Tribunal agreed, emphasizing that the appellant's claim falls within the provisions of the existing law.

Issue 2: Application of Rule 9 (1)(b) or (bb) of Cenvat Credit Rules, 2004
The appellant's refund claim was also challenged under Rule 9 (1)(b) or (bb) of Cenvat Credit Rules, 2004. The appellant argued that there was no suppression of fact or malicious intent involved in the payment of CVD and SAD, as they fulfilled their obligation without any departmental notice. The Tribunal concurred, stating that in the absence of any charge or adjudication regarding suppression of facts, the invocation of Rule 9 (1)(b) or (bb) based on assumption and presumption is unfounded. The payment of CVD and SAD was deemed legitimate as the appellant rectified excess import under advance license, without any offense detected by the department.

Additional Observations:
The Tribunal noted that apart from the legal issues discussed, there was a lack of detailed examination of facts, documents, and verification. Therefore, the matter was remanded for further review and processing of the appellant's refund claim by the Adjudicating Authority.

In conclusion, the impugned order was set aside, and the appeals were allowed by way of remand to the Adjudicating Authority for a more comprehensive assessment of the refund claim.