2022 (8) TMI 310 - AT - Central Excise

Refund claim of unutilised CENVAT Credit - exports as per provision contained in Rule 5 of the CENVAT Credit Rules, 2004 vis. a vis. Notification No. 27/2012-CX (NT) dated 18.06.2012 - grant of cash relief against pre-GST CENVAT Credits - Section 142 of the CGST Act - as per the notification claimant to take back the credit of the difference between the amount claimed and amount sanctioned - HELD THAT - It is a fact that sub-para (i) of Para-2 of Notification No. 27/2012-CX (NT) permits the claimant to take back the credit of the difference between the amount claimed and amount sanctioned. Here amount sanctioned being zero, the entire credit could have been taken back by the Appellant but such an action can only be initiated upon completion of the entire adjudication and appeal process or by way of its abandonment or else in the event of taking a re-credit, if Appellant Authority allows the refund, it would amount to acceptance of dual benefits in taking advantage of improper wordings in the notification that remained silent as to at what stage the claimant can re-credit the amount back to its account. Such a long waiting by the Appellant in not venturing into such an unethical practice exhibits the bonafideness of a law abiding national. More importantly, going by Section 11 of the CPC if any relief is sought from the Court of Law and it is not expressly granted, it is deemed to have been refused. The Appellant is entitled to get cash refund with applicable interest, if any, against CENVAT Credit available to its credit during pre GST regime as per provision contained in Section 142(3) of the CGST Act.

Summary

Issues involved: Determination of re-credit of debited amount during filing of refund claim of unutilized CENVAT Credit against exports under Rule 5 of the CENVAT Credit Rules, 2004 vis-a-vis Notification No. 27/2012-CX (NT) dated 18.06.2012.

Analysis:

1. Background of the Case: The Appellant exported goods accumulating CENVAT credit during October to December 2013. A refund claim for the accumulated CENVAT Credit was filed but rejected as time-barred without notice. Appeals to the Commissioner and Revisionary Authority were unsuccessful due to jurisdictional issues. The present appeal addresses the re-credit issue settled in previous Tribunal decisions.

2. Jurisdiction of CESTAT: The Respondent suggested delaying the appeal pending a Larger Bench decision on CENVAT Credit refund under the CGST Act. However, the Tribunal rejected the suggestion citing provisions of Section 174 of the CGST Act and past decisions. The issue was considered settled, justifying early hearing granted to the Appellant.

3. Specific Issue: The Appellant sought re-credit of debited CENVAT Credits after the rejection of the refund application. The appeal did not challenge the rejection's legality but focused on re-crediting the amount. The Appellant's plea was based on Section 142 of the CGST Act, emphasizing cash relief against pre-GST CENVAT Credits.

4. Legal Interpretation: The Tribunal analyzed the notification provisions and case laws cited by both parties. It noted that the Appellant could take back the entire credit under the notification, but such action required completion of the adjudication process. The Tribunal emphasized the Appellant's ethical conduct in not exploiting the notification's ambiguity for dual benefits. Referring to Section 11 of the CPC, the Tribunal highlighted the Appellant's right to appeal against the deemed refusal of relief.

5. Decision and Order: The Tribunal allowed the appeal, modifying the Commissioner's order to grant the Appellant a cash refund of Rs.35,52,543 against unutilized CENVAT Credit, with applicable interest. The Respondent-Department was directed to make the payment within two months of the order receipt.

This detailed analysis of the judgment addresses the issues involved, legal interpretations, and the final decision rendered by the Tribunal, ensuring a comprehensive understanding of the case.