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2018 (9) TMI 1576 - AT - Central ExciseRefund claim of amount reversed - appellant cleared the goods availing the benefit of Notification No.33/2012-CE after reversing an amount of 6% - refund claimed as it appeared that the said amount of 6% was not required to be paid for availing the notification benefit - refund claim was denied on the ground of Limitation - unjust enrichment - transition to GST Regime - transitional credit - Held that - The disputed amount of ₹ 5,20,800/- has otherwise passed muster under Section 11B of the Central Excise Act, 1944. The original authority, while rejecting the claimed amount of ₹ 6,55,200/- on the grounds of limitation did not find any such fault with the impugned amount of ₹ 5,20,800/-. Neither has the amount been found hit by unjust enrichment as per the provisions of Section 11B of the Central Excise Act, 1944. Transitional provisions of Section 142 (3) of the GST Act - Held that - Once the GST regime is in force, the pending refund claim, if sanctioned, will necessarily have to be paid in cash irrespective of the fact whether the refund amount pertains to that emanating from cenvat account or from account current. Any other interpretation would lead to a situation where the assessee, who is otherwise undisputedly entitled to the refund amount of ₹ 5,20,800/- is left high and dry only because that amount emanated from their erstwhile cenvat account - Refund allowed. Appeal restored.
Issues:
Refund claim under Notification No.33/2012-CE, rejection of refund claim on grounds of limitation, nature of refund (cash refund or recredit to cenvat account), applicability of transitional provisions under GST regime, interpretation of Section 142(3) of the Central Goods and Service Tax Act, 2017. Analysis: 1. Refund Claim under Notification No.33/2012-CE: The assessees, registered for manufacturing Injection Moulding Machines falling under Chapter 84 of the Central Excise Tariff Act, 1985, had cleared goods availing the benefit of Notification No.33/2012-CE by reversing an amount of 6%. A refund claim of ?11,76,000/- was filed as it was believed that the 6% amount was not required to be paid for availing the notification benefit. 2. Rejection of Refund Claim on Grounds of Limitation: The original authority sanctioned a refund of ?5,20,800/- as cash refund but rejected the balance of ?6,55,200/- on grounds of limitation. The department contended that the refund should have been made only by recrediting the cenvat account and not as cash refund. 3. Nature of Refund - Cash Refund or Recredit to Cenvat Account: The Commissioner (Appeals) remanded the case to the original authority to sanction refund by recrediting the cenvat credit account after necessary verification. The assessee argued that the direction to credit the amount into the cenvat account would defeat their rights as they cannot carry forward this credit as transitional credit into the GST regime. 4. Applicability of Transitional Provisions under GST Regime: The Tribunal noted that the Central Excise Act, 1944, and the Finance Act, 1994, had been subsumed by the Central Goods and Service Tax Act, 2017. The Tribunal referred to Section 142(3) of the Act, which mandates that any refund amount accruing to a person before, on, or after the appointed day shall be paid in cash, regardless of whether it pertains to the cenvat account or account current. 5. Interpretation of Section 142(3) of the Central Goods and Service Tax Act, 2017: The Tribunal held that under the GST regime, pending refund claims, if sanctioned, must be paid in cash, irrespective of the source of the refund amount. Any other interpretation would unjustly deprive the assessee of their entitlement to the refund amount. Consequently, the impugned order was set aside, restoring the original authority's order. 6. Conclusion: The appeal was allowed, and the impugned order was set aside, leading to the restoration of the original authority's order. The Tribunal emphasized that under the GST regime, pending refund claims must be paid in cash, ensuring that the assessee receives the entitled refund amount. The Miscellaneous Application filed by the appellant for stay of the impugned order was also disposed of. (Pronounced in Court on 25.09.2018)
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