9911796707
TMI Blog2019 (4) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... he lower authority cannot sanction such refund as it would constitute judicial indiscipline. Therefore, the lower authority was correct in rejecting the request of the appellant. A plain reading of Section 140 of the CGST Act shows that it provides for transfer of CENVAT credit lying in balance in the assessee s account just before the CGST Act came into force. It does not provide for CENVAT credit which may have accrued to the assessee prior to this date but which was not in balance in their books of account. CESTAT was created under the Customs Act, 1962 and has been given powers under the Central Excise Act, 1944 and the Finance Act, 1994. Therefore, the powers of interpretation and application of these laws alone is the jurisdiction of the CESTAT. However, when other laws have a bearing on the application of these three laws, (e.g.: SEZ Act, Foreign Trade Development and Regulation Act, various Environmental laws), interpretation of such laws also falls within the scope of CESTAT insofar as they affect the application of the Customs Act, Central Excise Act and Finance Act, 1994. The appellant s claim for refund of the disputed amount of CENVAT credit under Rule 5 has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act came into force as input tax credit under the CGST Act. The present case is one where some credit of CENVAT could have been taken by the appellant in their account and transferred to their new account as input tax credit but they did not. They requested the Central Excise officers to refund this CENVAT credit in cash which was declined and which is the point of dispute. 4. The facts of this case are that the appellants are manufacturers of seamless casting pipes which they also export. They were registered with the Central Excise Department and also availed benefit of CENVAT Credit under CENVAT Credit Rules, 2004. Rule 5 of CCR 2004 provides for refund of CENVAT Credit on the inputs used for manufacture of final products which are exported, subject to procedures, safeguards, conditions and limitations as may be specified by the Board by notification in the official gazette. Notification No. 27/2012-CE(NT), dated 18.06.2012 was issued prescribing these conditions. In terms of this notification and the Rule 5 of CCR 2004, the appellant filed a refund claim for unutilised part of the accumulated CENVAT Credit of ₹ 1,95,30,803/- availed on inputs/input services used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons under section 142. Section 142 of CGST Act 2017 deals with transitional provisions which is reproduced below: 142. (1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer: Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply. (2) (a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed forward under this Act. (5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944. (6) (a) every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act: Provided that no refund shall be allowed of any amount of CENVAT credit where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. (9) (a) where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act; (b) where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day. Explanation. For the purposes of this Chapter, the expressions capital goods , Central Value Added Tax (CENVAT) credit , first stage dealer , second stage dealer , or manufacture shall have the same meaning as respectively assigned to them in the Central Excise Act, 1944 or the rules made thereunder. 7. In terms of the first proviso to Section 142(3) of CGST Act, 2017, where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse. The Assistant Commissioner had, therefore, communicated this provision to the appellant in reply to their request for refund of the CENVAT Credit which was already rejected by the Tribunal. Aggrieved by this letter of the Assistant Commissioner, the appellant appealed to the first appellate authority who, in the impugned order, held as follows: The issue on merits relates to the refusal of the original authority to permit appellants to take re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not take back the credit of the amount. It would be unfair for them to lose the credit for this reason and therefore this amount may be refunded to them in cash. He relied on the judgment of Hon ble Tribunal of Chandigarh in the case of Great India Steel Fabricators vs. CCE ST, Panchkula [2019(3)TMI 103- CESTAT Chandigarh] in which it was held that in terms of Section 142 of CGST Act 2017, sanction of all refund claims has to be made in cash and therefore no authority can sanction refund claim to be credited to CENVAT Credit account. On a perusal of this order, it appears that in that case, the lower authority sanctioned refund of CENVAT under Rule 5 of CCR 2004, by way of credit to their CENVAT account which was held to be incorrect. Accordingly, in that particular case, the appeals of the assessee were allowed. He also relied on the order of CESTAT, Chennai in the case of Castrol India Limited [2019(3)TMI 974 CESTAT Chennai] in which when the factory was closed, the assessee was allowed refund of unutilised CENVAT Credit lying in the balance. 9. Ld. DR reiterates the findings of the lower authority and asserts that the issue of refund of CENVAT Credit has already been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund as requested by the appellant? Judicial discipline demands the lower authority follows the decision of the higher authority. Once it is decided by the CESTAT that the appellant is not entitled to refund of some amount of the CENVAT credit under Rule 5 of the CCR, 2004, the lower authority cannot sanction such refund as it would constitute judicial indiscipline. Therefore, the lower authority was correct in rejecting the request of the appellant. b) Whether the appellant, who had not taken credit of CENVAT in their account (which they could legitimately do prior to the CGST Act coming into force), can now seek transfer of such credit as Input Tax credit in CGST Act or cash refund? A plain reading of Section 140 of the CGST Act shows that it provides for transfer of CENVAT credit lying in balance in the assessee s account just before the CGST Act came into force. It does not provide for CENVAT credit which may have accrued to the assessee prior to this date but which was not in balance in their books of account. There is also no provision either under the old laws or under the CGST Act of cash refund of any CENVAT which may have accrued to the assessee prior to the CG ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
