2024 (7) TMI 543 - AT - Central Excise

Refund of accumulated Cenvat credit which was the balance lying in its Cenvat Credit account under the head Education Cess and SHE Cess as on 30-06-2017 - time limitation. Whether Appellant is eligible for refund of Rs.47,98,760/-, which was the balance lying in its Cenvat Credit account under the head Education Cess and SHE Cess as on 30-06-2017? - HELD THAT - The issue relating to refund of accumulated Cenvat credit of Education Cess and SHE Cess lying unutilized on 30-06-2017 has come up for consideration before this Tribunal in a series of cases. The issue is no more res integra. In the case of NU Vista Ltd. Vs. CCE 2022 (3) TMI 1254 - CESTAT NEW DELHI , the Division Bench of this Tribunal has held that accumulated Cenvat credit on account of Education Cess and SHE Cess is a vested right and its refund is admissible. The aforesaid issue had also come up for consideration in the case of Bharat Heavy Electricals Ltd. Vs. Comm., CGST Bhopal 2019 (4) TMI 1896 - CESTAT NEW DELHI , the Division Bench of the Tribunal held that Appellants were eligible for claimed refund. Refund allowed. Whether the claimed refund was barred by limitation? - HELD THAT - Similar issue had come up for consideration before this Tribunal in the case of Jai Mateshwaari Steels (Pvt.) Ltd. Vs. Commissioner, CGST Dehradun 2022 (3) TMI 49 - CESTAT NEW DELHI , it was held that limitation of 1 year provided under Section 11B is not applicable to the cases of refund under Section 142(3) of CGST Act, 2017 - the limitation prescribed under Section 11B is not applicable due to overriding effect of the CGST Act, 2017. The impugned order is set aside - Appeal allowed.

Issues Involved:

1. Eligibility for refund of Rs. 47,98,760/- under Education Cess and SHE Cess.
2. Whether the claimed refund was barred by limitation.

Issue-Wise Detailed Analysis:

A. Eligibility for Refund:

The Appellant sought a refund of Rs. 47,98,760/- lying in its Cenvat Credit account under Education Cess and SHE Cess as of 30-06-2017. The Adjudicating Authority and the Commissioner (Appeals) both held that these balances did not qualify as 'eligible duties' and thus could not be transitioned to GST. The Appellant reversed the credit and filed for a refund. The Tribunal referenced multiple cases to support the Appellant's claim, notably:

1. NU Vista Ltd. Vs. CCE (2022): The Tribunal held that accumulated Cenvat credit on account of Education Cess and SHE Cess is a vested right and its refund is admissible. The Tribunal stated, "It is not in dispute that prior to 1-3-2015 cess was leviable on manufactured goods, in addition to excise duty and the appellant had availed credit under the provisions of the Credit Rules on cess paid on procurement of goods and services."

2. Bharat Heavy Electricals Ltd. Vs. Comm., CGST Bhopal (2019): The Tribunal found that credits earned were a vested right and could not be extinguished by a change in law unless specifically provided. The Tribunal stated, "Thus merely by change of legislation suddenly the appellants could not be put in a position to lose this valuable right."

3. Godrej & Boyce Manufacturing Co. Ltd. V. Union of India (2023): The Bombay High Court considered the non-notification of amendments to Section 140 of the CGST Act.

The Tribunal concluded that the Appellant was eligible for the claimed refund based on these precedents and the principle that Cenvat credit is a vested right.

B. Barred by Limitation:

The Commissioner (Appeals) held that the refund claim was filed after one year from the date of credit reversal and was thus time-barred. However, the Tribunal found this issue to be no longer res integra, referencing:

1. Jai Mateshwaari Steels (Pvt.) Ltd. Vs. Commissioner, CGST Dehradun (2022): The Tribunal ruled that the limitation of one year under Section 11B is not applicable to refunds under Section 142(3) of the CGST Act, 2017. The Tribunal stated, "Admittedly, in the facts of the present case, no limitation is applicable as provided under Section 11B (one year from the relevant date), due to overriding effect of CGST Act."

The Tribunal held that the limitation prescribed under Section 11B was not applicable due to the overriding effect of the CGST Act, 2017.

Conclusion:

The Tribunal set aside the impugned order and allowed the appeal with consequential relief, confirming the Appellant's eligibility for the refund of Rs. 47,98,760/- under Education Cess and SHE Cess and ruling that the refund claim was not barred by limitation. The order was pronounced in open court on 09th July, 2024.

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