2024 (8) TMI 474 - 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 - HELD THAT - The appellant have claimed the refund of Cenvat of CVD and SAD in terms of Section 142 (3) of CGST, 2017 - From 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 GST 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 per various judgments cited by the learned Counsel support the case of the appellant. Whether the appellant s claim of CVD and SAD is hit by Rule 9 (1) (b) or(bb) of Cenvat Credit Rules, 2004? - HELD 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. Moreover, the payment of CVD and SAD is not towards the non-payment of duty by suppression of fact - 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 refund claim of the appellant - the impugned order is set aside - appeal allowed by way of remand.

Summary

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

Analysis:
The appellant claimed a refund of Cenvat of CVD and SAD under Section 142 (3) of the CGST Act, 2017. The Section allows for the refund of any amount of CENVAT credit, duty, tax, interest, or any other amount paid under the existing law, to be disposed of in accordance with the provisions of the existing law. The appellant argued that they fulfilled their obligation of payment of CVD and SAD suo moto without any notice from the department, and hence Rule 9 (1)(b) or (bb) of Cenvat Credit Rules, 2004 cannot be invoked.

In examining whether the appellant's claim is hit by Rule 9 (1)(b) or (bb) of Cenvat Credit Rules, 2004, it was noted that there was no demand notice or adjudication regarding the payment of CVD and SAD made by the appellant on their own. The absence of any charge through a show cause notice or adjudication precludes the application of Rule 9 (1)(b) or (bb) based on assumptions or presumptions. The payment of CVD and SAD by the appellant was not due to non-payment of duty by suppression of fact, as the excess import under the advance license was regularized by the appellant voluntarily. Therefore, no suppression of fact was established, and penal provisions under Rule 9 (1)(b) or (bb) were deemed inapplicable.

It was observed that apart from the legal issue, there was no discussion about the facts, documents, or verification thereof. Consequently, the matter was remanded for further processing the refund claim of the appellant. The impugned order was set aside, and the appeal was allowed by way of remand to the Adjudicating Authority for a detailed review and verification of the facts.

This judgment highlights the importance of adherence to legal provisions and the need for a thorough examination of facts and documents in refund claims related to Cenvat credit, ensuring that procedural requirements are met before invoking penal provisions.