2024 (6) TMI 906 - AT - Central Excise

Refund of differential duty related to payment of Additional duty of customs SAD - Transitional arrangements for input tax credit - HELD THAT - As per the section 140(1) of the CGST ACT, 2017 CENVAT Credit of eligible duties can be carried forward as closing balance in ST-3 or ER-1 Returns as on 30.06.2017, thus as submitted by the appellant, differential duty paid after 01.07.2017 could not statutory be shown as credit carried forward in ER 1 Return as on 30.06.2017 even if the appellant had filed the return at a later stage. There is no enabling provision of CGST Act, 2017 for the transactional of the CENVAT credit of CVD and SAD paid on or after 01.07.2017. Section 142(3) of the CGST Act, 2017 governs the law relating to the transitional provisions including the refund of CENVAT Credit, duty, tax, interest or any other amount paid under the existing law and any amount eventually accruing to the person, which is not carried forward to GST. Thus it is evident that the duty paid by the appellant on or after 01.07.2017 cannot be included in the ER-1 Return for the period ending on 30.06.2012 and the finding given by the lower authority in this regard is unsustainable. Regarding CBIC Circular No. 207/5/2017 Service Tax dated 28.09.2017, the procedure prescribed therein was only in respect of service tax paid under reverse charge on or after 01.07.2017. CVD and SAD paid after 01.07.2017 on the goods imported prior to 01.07.2017 where eligible for CENVAT Credit, but could not avail because of introduction of GST from 01.07.2007 are eligible for refund in cash in terms of section 142(3) of CGST act 2017. Appeal allowed.

Summary

Issues involved:
Claim for refund of CENVAT Credit u/s CGST Act 2017, Jurisdiction of Tribunal, Eligibility of duty payment for CENVAT Credit, Bar of unjust enrichment, Interest on delayed refund.

Claim for refund of CENVAT Credit:
The appellant, a manufacturer of Iron & Steel products, filed a refund claim for differential duty related to Additional duty of customs & SAD. The claim was restricted to Rs. 1,24,80,590/- as per CGST Act 2017. Adjudicating authority rejected the claim under section 11B of Central Excise Act 1944. Appeal was remanded by Learned Commissioner (Appeals) and further appealed. Tribunal allowed stay application for De-novo adjudication.

Jurisdiction of Tribunal:
The appellant argued the Tribunal's jurisdiction based on a larger bench decision stating that an appeal can lie to the Tribunal against an order passed under section 142 of the CGST Act 2017.

Eligibility of duty payment for CENVAT Credit:
The appellant paid additional duty of Customs and SAD after 01.07.2017, which was not included in the ER-1 Return for June 2017. The appellant claimed eligibility for CENVAT Credit on imported Coking Coal paid on finalization of provisional assessment under section 18 of the Customs Act 1962.

Bar of unjust enrichment:
The appellant argued that the input use in the manufacture of the final product does not attract the bar of unjust enrichment as per section 11(B) of the CEA 1944.

Interest on delayed refund:
The appellant claimed interest for the delay in refund payment, citing relevant court decisions. The refund application was submitted on 05.11.2008, and the refund was to be paid within 3 months from the submission date.

Conclusion:
The Tribunal allowed the appeal, stating that duty paid after 01.07.2017 on goods imported prior to that date is eligible for CENVAT Credit refund in cash as per section 142(3) of the CGST Act 2017. The lower authority's finding regarding duty payment inclusion in ER-1 Return was deemed unsustainable. The appellant's arguments were supported by relevant judgments, leading to the allowance of the appeal.