2020 (3) TMI 372 - CGOVT - Central Excise

Refund of Excise Duty - time limitation - rebate on the enhanced value which includes the expenses incurred on account of freight and insurance etc. - HELD THAT - Government finds that it is not in dispute that the goods were exported and Central Excise duty has been paid on the export goods. The applicant has paid duty as per value mentioned in ARE-1 which is higher than the transaction value determined under Section 4 of Central Excise Act, 1962 and has claimed rebate on the enhanced value which includes the expenses incurred on account of freight and insurance etc. It is observed that the original adjudicating authority has credited the excess amount paid as duty on export goods in the Cenvat credit account as per the applicant s request. The Government is of view that the excess amount paid by the applicant on freight and insurance was not payable as Central Excise duty. It is observed that rebate can be granted only to the extent of duty paid on export goods. The amount paid in excess of duty payable does not assume the character of duty as defined under Rule 2(e) of Central Excise Rules, 2002 in which duty means the duty payable under Section 4 of the Central Excise Act. The Government is of the view that the applicant should have followed the provisions of Cenvat Credit Rules, 2017 Notification No. 20/2017-C.E. (N.T.), dated 30-6-2017 for claiming the Cenvat credit allowed to him by the Adjudicating Authority during the transitional period or the procedure prescribed under sub-sections (3), (4) (5) of Section 142 of CGST Act, 2017 which prescribes that refunds of tax/duty paid under the existing law, viz. Central Excise Act, 1944, shall be disposed of in accordance with the provisions of the existing law - Since the applicant has not followed the aforesaid procedure prescribed by law, Revision Application is non-maintainable and is rejected.

Summary

Issues:
1. Rebate claims under Central Excise Rules for exported goods.
2. Dispute over the payment of duty on freight and insurance charges.
3. Applicability of transitional provisions under the CGST Act, 2017 for refund claims.

Analysis:
1. The applicant, engaged in manufacturing automobile tyres, filed rebate claims for duty paid on exported rubber tyres under Central Excise Rules. The adjudicating authority sanctioned the claims but credited the excess duty paid on freight and insurance charges to the Cenvat credit account. The Commissioner (Appeals) rejected the appeal, upholding the original order.

2. The applicant argued that post-GST implementation, the excess duty on freight and insurance should have been refunded in cash as per Section 142(3) of the CGST Act, 2017. The Government found that excess amounts on freight and insurance were not payable as Central Excise duty. C.B.E. & C. Circulars clarified that only duty paid on exported goods is refundable in cash, not amounts paid voluntarily in excess.

3. Referring to a Punjab & Haryana High Court case, it was established that excessive duty paid through Cenvat credit cannot be refunded in cash. The court ruled that only duty payable and paid on exported goods is eligible for cash refund. The applicant's request for cash refund under transitional provisions of the CGST Act was deemed non-maintainable as they did not follow prescribed procedures.

In conclusion, the Revision Application was rejected as the applicant did not adhere to the procedures outlined in the law for claiming refunds during the transitional period. The judgment clarified the principles governing rebate claims, excess duty payments, and the applicability of transitional provisions under the CGST Act, 2017.