9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (1) TMI 605 - AT - Central ExciseRejection of refund claim - time limitation - case of Revenue is that the cause for claiming the refund of the said amount had risen on 28.08.2017 when the tax was deposited under RCM and the refund claim filed on 23.09.2021 was beyond the prescribed time limit of one year, hence the same is time barred - principles of unjust enrichment - HELD THAT - Though credit is not available as input tax credit under GST law, the credit under the old Credit Rules is eligible to the appellant and such credit has to be processed under Section 142(3) of GST Act, 2017 and refunded in cash to the assessee. Therefore, the appellant is eligible to the said relief and the Department is accordingly directed to process the case of the appellant in accordance with the said decision. Similar view has been taken in the subsequent decision in the case of M/s. Nitin Industries vs. Commissioner of CGST ST, New Delhi 2022 (11) TMI 1090 - CESTAT NEW DELHI that the appellant is entitled to refund in terms of Section 142(3) read with Section 54 read with Section 49(6) of the CGST Act. From the view taken by the various High Courts, it is settled that denial of credit of tax or duty paid under existing law would amount to violation of Articles 14 and 300 A of the Constitution of India. Unutilised credit has been recognized as vested right and property in terms of Article 300 A of the Constitution of India. In Adfert Technologies Private Limited vs. Union of India 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT , the Division Bench of the High Court held that transitional credit being a vested right, it cannot be taken away on procedural or technical grounds. Principles of unjust enrichment - HELD THAT - There is no question of unjust enrichment in the present case as the amount involved is towards the credit. Conclusion - The provisions of Section 11B(1) which prescribes the limitation for filing the refund claim are not covered under Section 142 (3), therefore, the rejection of the refund claim on the ground of limitation is erroneous and is unsustainable also on the peculiar facts of the present case, where the appellant was eligible to carry forward/transit the Canvat Credit amounting to Rs.2,67,659/- under the transitional provisions of Section 140 of CGST Act. There is no question of unjust enrichment in the present case as the amount involved is towards the credit. Appeal allowed. 1. ISSUES PRESENTED and CONSIDERED The core legal questions considered in this judgment are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Time-barred Refund Claim Relevant Legal Framework and Precedents: The legal framework revolves around Section 11B of the Central Excise Act, 1944, which prescribes a limitation period for filing refund claims. The appellant argued that the relevant date for limitation should be the date of the show cause notice, not the date of tax deposit. The appellant cited precedents from Circor Flow Technologies India Pvt. Ltd. and Nitin Industries, which supported the interpretation that the relevant date is the date of the order-in-original. Court's Interpretation and Reasoning: The court agreed with the appellant's interpretation, stating that the issuance of the show cause notice on 12.08.2021 is the relevant date for calculating the limitation period. Therefore, the refund claim filed on 23.09.2021 was within the permissible period. Key Evidence and Findings: The court found that the appellant had paid the service tax voluntarily under self-assessment and was entitled to avail the benefit of credit. The denial of this credit by the department was erroneous. Application of Law to Facts: The court applied Section 174(2) of the GST Act, which protects rights acquired under the repealed Act, to conclude that the appellant's right to credit was preserved. Treatment of Competing Arguments: The court dismissed the respondent's argument that the refund claim was time-barred by emphasizing the protection of rights under the GST Act. Conclusions: The court concluded that the refund claim was not time-barred and was filed within the appropriate period. Issue 2: Entitlement to Refund under Transitional Provisions Relevant Legal Framework and Precedents: The transitional provisions under Section 140 of the CGST Act and Section 142(3) were central to this issue. The court referenced decisions such as Adfert Technologies Private Limited and Siddharth Enterprises, which upheld the right to transitional credit. Court's Interpretation and Reasoning: The court noted that the right to credit is a vested right protected under Article 300A of the Constitution. The court emphasized that denying this right would violate constitutional protections. Key Evidence and Findings: The court found that the appellant had rightly availed the Input Tax Credit in the TRAN-I Form, but the benefit was wrongly denied by the department. Application of Law to Facts: The court applied Section 142(3) of the GST Act, which mandates that refund claims be processed in accordance with the existing law, ensuring the appellant's right to credit. Treatment of Competing Arguments: The court rejected the department's argument that the refund claim was invalid due to procedural issues, citing constitutional protections. Conclusions: The court concluded that the appellant is entitled to the refund under the transitional provisions of the CGST Act. Issue 3: Unjust Enrichment Relevant Legal Framework and Precedents: The principle of unjust enrichment typically prevents refund claims if the claimant has passed on the tax burden to another party. The appellant argued that this principle does not apply to service tax paid under the reverse charge mechanism. Court's Interpretation and Reasoning: The court agreed with the appellant, noting that service tax under reverse charge is not passed on to others, and thus, unjust enrichment does not apply. Key Evidence and Findings: The court found no evidence that the appellant had passed on the tax burden, as no invoice was raised for the reverse charge service tax. Application of Law to Facts: The court applied the principle of unjust enrichment and concluded that it was inapplicable in this case. Treatment of Competing Arguments: The court dismissed the department's argument regarding unjust enrichment due to the nature of the reverse charge mechanism. Conclusions: The court concluded that unjust enrichment does not apply, and the refund claim should not be rejected on this ground. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: The court observed, "The provisions of Repeal & Savings in Section 174 (2) of GST Act protected the right of credit even though the provisions of Central Excise & Service Tax were repealed." Core Principles Established: The judgment reinforced the principle that transitional credits are vested rights protected under the Constitution and cannot be denied on procedural grounds. It also established that the relevant date for refund claims should be the date of the show cause notice, not the tax deposit date. Final Determinations on Each Issue:
|
