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2024 (8) TMI 88 - AT - Central Excise100% EOU - Rebate claim/Refund of Cenvat credit under Rule 5 of the Cenvat Credit Rules - cash refund - transition of credit - time limitation - Revenue s contention is that the Cenvat credit could have been transitioned as ITC under GST by filing Form TRAN-I - time limitation - HELD THAT - It is undisputed that Cenvat credit was available to the appellant after the order of the Commissioner was passed in the remand proceedings. It is true that the appellant could have transitioned the credit under TRAN-I as ITC under GST. The appellant could also have claimed refund of this amount under Rule 5 of CCR. However, since the department had agitated the matter before the High Court, the appellant waited for the order of the High Court and only thereafter filed the refund claim. The appellant should have filed refund claim under Rule 5 of the CCR, but wrongly filed it under Rule 18 of the CER. The undisputed legal position is that Rule 5 of the CCR provides for refund of Cenvat credit in cash in respect of the goods exported. It is a settled legal position in this case that the appellant was entitled for Cenvat credit of Rs. 76,72,000/-. Instead of claiming refund under Rule 5 of CCR, the appellant claimed it citing Rule 18 of CER. The Assistant Commissioner also wrongly sanctioned it quoting Rule 18 of CER. However, there cannot be any dispute about the fact that the appellant was entitled to refund of the said amount under Rule 5 of CCR because it pertained to exports and the appellant was a 100% EOU. The appellant was not required to only transition the credit through TRAN-I. Section 142 (3) of the CGST Act provides for cash refund. The appellant was entitled to refund of Cenvat credit of Rs. 76,72,000/- under Rule 5 of CCR. This substantive benefit of the appellant cannot be taken away because the appellant had quoted the wrong rule in filing its refund claim and the Assistant Commissioner also sanctioned the refund quoting the wrong rule. Time Limitation - HELD THAT - It was the Revenue which agitated the matter and appealed to the High Court. It is true that without waiting for the judgment of the High Court, the appellant could have filed the refund claim but the appellant waited the judgment of the High Court dated 13.12.2017 2017 (12) TMI 1272 - DELHI HIGH COURT and thereafter filed the refund claim on 08.01.2018. Thus, the claim was not hit by limitation. The impugned order is set aside - appeal allowed.
Issues Involved:
1. Entitlement to Cenvat credit of Rs. 76,72,000/-. 2. Validity of refund claim under Rule 18 of CER and section 11B of CEA. 3. Limitation period for filing the refund claim. 4. Transition of Cenvat credit to Input Tax Credit (ITC) under GST. Issue-wise Detailed Analysis: 1. Entitlement to Cenvat credit of Rs. 76,72,000/-: The appellant, a 100% Export Oriented Unit (EOU), initially exported goods under a claim for rebate and paid duty, which was later repaid along with interest upon the department's insistence. The appellant then took Cenvat credit of Rs. 76,72,000/- for the duty paid on the final products. The department sought to deny this credit, leading to litigation. The Tribunal, in the first round, remanded the matter to the Commissioner, who eventually allowed the Cenvat credit. This decision was upheld by the High Court, establishing the appellant's entitlement to the Cenvat credit. 2. Validity of refund claim under Rule 18 of CER and section 11B of CEA: The appellant filed a refund claim under Rule 18 of the CER read with section 11B of the CEA, which was sanctioned by the Assistant Commissioner. However, the Commissioner (Appeals) set aside this sanction, arguing that the refund claim was not admissible under Rule 18, as it was not a claim for refund of duty paid on materials used in the manufacture of exported goods. The Tribunal noted that the appellant should have filed the refund claim under Rule 5 of the Cenvat Credit Rules (CCR), which provides for a cash refund of Cenvat credit for exported goods. Despite the incorrect rule citation, the Tribunal held that the appellant was substantively entitled to the refund under Rule 5 of CCR. 3. Limitation period for filing the refund claim: The Commissioner (Appeals) contended that the refund claim was barred by limitation as it was filed on 08.01.2018, after the High Court's decision on 13.12.2017. The Tribunal found that the delay was attributable to the appellant awaiting the High Court's judgment. Considering the circumstances, the Tribunal concluded that the refund claim was not time-barred. 4. Transition of Cenvat credit to Input Tax Credit (ITC) under GST: The Revenue argued that the appellant should have transitioned the Cenvat credit to ITC under GST by filing Form TRAN-I. The Tribunal acknowledged that while the appellant could have transitioned the credit, section 142(3) of the CGST Act allows for cash refunds of Cenvat credit under the existing law. Therefore, the appellant was entitled to a cash refund of the Cenvat credit, notwithstanding the transition provisions. Conclusion: The Tribunal set aside the impugned order of the Commissioner (Appeals) and allowed the appeal, granting consequential relief to the appellant. The substantive benefit of the refund could not be denied due to the incorrect rule citation in the refund claim. Order Pronounced: (Order pronounced in open court on 01/08/2024.)
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