2024 (1) TMI 927 - AT - Central Excise

Seeking cash refund of CENVAT Credit u/s 142(3) of CGST Act, 2017 - Non-fulfilment of export obligation for the capital goods procured under EPCG License - HELD THAT - On going through the copy of challan produced by the Appellant, it is seen that it has been submitted that Duty of Customs amounting to Rs.11,32,417/- has been paid, in which CVD SAD of Rs.2,97,797/- are integral part. From the Order portion of OIO, it is seen that there is no dispute that the amount of Rs.2,97,797/- is on account of payment of CVD SAD only. In the case of M/S MITHILA DRUGS PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJASTHAN) 2022 (3) TMI 58 - CESTAT NEW DELHI , the Delhi Bench has held refund of CVD and SAD in question is allowable, as credit is no longer available under the GST regime, which was however available under the erstwhile regime of Central Excise prior to 30.06.2017. Accordingly, I hold that the appellant is entitled to refund under the provisions of Section 142(3) and (6) of the CGST Act. In above case law, the issue was identical i.e., as to whether CVD SAD as part of Custom Duties paid subsequent to 01.07.2017 on account of non-fulfilment of Export Obligation, are eligible for cash refund when the Appellant cannot take these amounts as Cenvat Credit. The co-ordinate Benches of Tribunal have been consistently holding that the Appellant would be eligible for Cenvat Credit. The issue in the present appeal is squarely is covered by the above decision. The Adjudicating Authority is directed to grant the refund along with interest, which is to be calculated from the initial date of filing the refund claim - appeal allowed.

Summary

Issues Involved:
1. Eligibility for cash refund under Sec.142(3) of CGST Act 2017 for CVD+SAD paid post-GST regime.
2. Jurisdiction of the Tribunal to entertain appeals against orders passed under Sec.142(3) of CGST Act 2017.

Summary:

1. Eligibility for Cash Refund:
The Appellant, M/s Sri Chakra Poly Plast India Pvt Ltd., was unable to fulfil the export obligation for capital goods procured under EPCG License and paid the total Customs Duty of Rs.11,32,417/-, including CVD+SAD of Rs.2,97,797/-. Since this payment was made under the GST regime, the Appellant could not avail Cenvat Credit and filed a refund claim for Rs.2,97,797/-. The Lower Authorities dismissed the refund claim, leading to the appeal before the Tribunal.

The Tribunal considered precedents where similar issues were decided in favor of the Assessees, such as:
- Mithila Drugs Pvt Ltd vs CGST, Udaipur [2022 (3) TMI 58 - CESTAT New Delhi]
- Clariant Chemicals India Ltd vs CCE & ST, Raigad [2022 (10) TMI 796 - CESTAT Mumbai]
- ITCO Industries Ltd vs CGST & CE, Salem [2022 (6) TMI 1040 - CESTAT Chennai]
- Flexi Caps & Polymers Pvt Ltd vs CGST & CE, Indore [2021 (9) TMI 917 - CESTAT New Delhi]

In these cases, the Tribunals consistently held that CVD+SAD paid post-GST regime for imports made prior to 30.06.2017 are eligible for cash refund under Sec.142(3) of CGST Act 2017, as the credit is no longer available under the GST regime.

2. Jurisdiction of the Tribunal:
The Larger Bench in Bosch Electrical Drive India Pvt Ltd concluded that appeals against orders passed under Sec.142(3) of CGST Act would lie to the Tribunal. The Tribunal reaffirmed that the appellate provisions under the existing law (Chapter V of the Finance Act and the Central Excise Act) continue to apply post-GST regime, thus maintaining the jurisdiction of the Tribunal.

Conclusion:
The Tribunal set aside the impugned Order and allowed the Appeal with consequential relief. The Adjudicating Authority was directed to grant the refund along with interest, calculated from the initial date of filing the refund claim. The Tribunal emphasized that the decisions in Mithila Drugs Pvt Ltd, Clariant Chemicals India Ltd, ITCO Industries Ltd, and Flexi Caps & Polymers Pvt Ltd, supported by the Larger Bench decision in Bosch Electrical Drive India Pvt Ltd, are applicable and binding.