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2022 (2) TMI 1168 - AT - Central Excise100% EOU - Refund in cash of duty paid under protest - whether the appellant can be given the benefit of Section 142 (3) of the Central Good and Service Tax Act, 2017, and allowed the refund claim in cash? - HELD THAT - Admittedly the present case is not in respect of any claim made for the refund of accumulated credit as per Rule 5, but is claim made under Section 11B for the duty erroneously paid under protest as per the direction of the departmental officers from the CENVAT account. It was also not the case that when the order for refund was made i.e. 05.05.2017 and when they had taken the credit they could not have utilized the same on account of closure of business etc. They were ongoing concern and were in position to avail the said credit. Further on introduction of the Good and Service Tax they were even permitted to carry forward the said credit to that regime. The appellants have by reversing the credit and filing the appeal subsequent to introduction created an instrument just to en-cash the CENVAT credit by resorting to Section 142 (6) (a) of the CGST Act. Since it is the submission of the appellant that the present refund claim has been filed by them under Section 11B, the issue of admissibility of interest needs to be adjudicated in terms of Section 11BB. Since both the authorities have considered the request as per section 11 BB and thereafter rejected the claim to interest in my view appeal should fail on this account also. It is also settled principle in law that nobody should be allowed the benefit of his own wrongs. Appeal dismissed.
Issues Involved:
1. Applicability of GST provisions to a refund claim filed before the introduction of GST. 2. Entitlement to cash refund versus credit in CENVAT account. 3. Eligibility for interest on the refund amount under Section 11BB of the Central Excise Act, 1944. Issue-wise Detailed Analysis: 1. Applicability of GST Provisions to a Refund Claim Filed Before GST Introduction: The appellant's claim for a cash refund was based on the provisions of Section 142(3) of the Central Goods and Services Tax (CGST) Act, 2017. However, the Commissioner (Appeals) held that since the refund claim was filed and allowed before the introduction of GST, the provisions of Section 142(3) were not applicable. The appeal was filed after the introduction of GST, but the refund itself was processed under the old regime. Therefore, the appellant was not entitled to a cash refund under the new GST provisions. 2. Entitlement to Cash Refund Versus Credit in CENVAT Account: The appellant argued that as a 100% Export Oriented Unit (EOU), they were entitled to a cash refund. However, the original authority and the Commissioner (Appeals) sanctioned the refund by way of credit in the CENVAT account. The appellate tribunal upheld this decision, noting that the refund was initially paid through the CENVAT Credit Account and that the appellant had availed of the credit in their books. The tribunal found that the appellant's subsequent reversal of the credit and appeal filing was an attempt to en-cash the CENVAT credit by exploiting Section 142(6)(a) of the CGST Act, which was deemed a colorable device. 3. Eligibility for Interest on Refund Amount Under Section 11BB of the Central Excise Act, 1944: The appellant contended that they were entitled to interest from the date of deposit of the duty. However, Section 11BB states that interest is chargeable when a refund is not made within three months from the date of receipt of the application. Both the original authority and the Commissioner (Appeals) held that the appellant was not eligible for interest as the period of three months had not expired. The tribunal agreed with this interpretation, noting that the claim to interest was correctly rejected under Section 11BB. Conclusion: The appeal was dismissed on all counts. The tribunal upheld the decision that the appellant was not entitled to a cash refund under the GST provisions, as the refund claim was processed under the old regime. The refund was correctly sanctioned as credit in the CENVAT account, and the appellant's claim to interest was rightly rejected under Section 11BB of the Central Excise Act, 1944. The tribunal also emphasized that the appellant's actions constituted a colorable device to claim undue benefits, which should not be allowed.
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