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TMI Blog2024 (6) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... TAX AND CENTRAL EXCISE, 2, THE ASST. COMMISSIONER, CENTRAL GOODS SERVICES TAX AND CENTRAL EXCISE, DIVISION I, JHARKHAND [ 2022 (2) TMI 934 - JHARKHAND HIGH COURT] has thus been contested by the appellant pointing out that the said case related to the claim of credit on invoices pertaining to a period prior to 30.06.2017, for receipt of services and transfer of credit against such invoices as ITC in GST to TRAN-1 return. Whereas in the present appeal filed by the appellant for refund CVD and SAD as no CENVAT credit could be availed, and as already stated above were made well beyond the said cut of date for filing of ER-1 and TRAN-1 returns. Applicability of section 142(3) of GST Act, 2017 - HELD THAT:- The question of refund in cash of CVD/SAD paid, on account of in admissibility of CENVAT credit, is now no more res-integra and cash refund of such duties paid utilising the provisions of section 142 have been liberally approved of by various judicial/ quasi-judicial authorities. The Principal Bench of the CESTAT 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] had observed ' I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable. The following table depicts the details of the amount thus paid by the appellant to the Government. Sr. No. EPCG authorisation No. Date Challan No. Date CVD (Rs.) SAD (Rs.) Total (Rs.) 01. 1130001860 dated 09.08.2010 Challan dated 01.10.2021 17,08,206 7,57,202 24,65,408 02 1130001962 dated 25.11.2010 Challan dated 24.12.2021 13,48,957 6,54,783 20,03,740 03 11300002385 dated 03.02.2012 Challan No. 165 M-1947 dated 25.03.2022 2,86,207 1,07,454 3,93,661 49,90,979/- 2. It is the contention of the appellant that in terms of the CENVAT Credit Rules, 2004 CCR , they are entitled to avail the CENVAT credit on the CVD and SAD components paid on such imported goods (towards the non-fulfilment of the export obligation), when such goods are used for manufacture of dutiable taxable goods pursuant to the payment of duty thereon. It is not the Revenue s case that utilisation of the said goods was not in accordance as claimed. 3. With the incorporation of the Goods and Service Tax (GST) with effect from 01 July, 2017 the appellant contends, that they were not in a position to avail the credit of CVD and SAD paid towards non-fulfilment of export obligation amounting to Rs. 49,90,979/-, thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lia that sub-section 3, 6 (a), 8(b) and 9(b) of Section 142 of GST Act 2017 clearly provide for disposal of such refund claim filed in accordance with the existing law and any amount eventually accruing to be paid in cash. The relevant provisions of section 142 are enumerated herein under: Section 142. Miscellaneous transitional provisions. (3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, 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 (1 of 1944): Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. (6)(a) every proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the OIA the appellants contends that this rejection of the refund on the said grounds were not appropriate as the appellant had undisputedly paid the CVD and SAD well after the introduction of the GST law and that no CENVAT Credit or ITC could be availed and nor ER-1 or TRAN-1 filed, as held by the learned Commissioner under para 8.2 of the order. 10. Learned advocate Shri Mukesh Soni further brought to notice that the department in a similar situation in an order passed by the learned Commissioner (Appeals) GST, Central Excise, Indore vide Order in Appeal No. IND-EXCUS-000-APP-018-20-21 dated 08.07.2020, allowed the payment of refund in cash in terms of section 142 (3) of the GST Act of CVD /SAD. The divergence of practice in similar situation is not only judicially but also ethically wrong. 11. It is an undisputed position that the fact of filing of ER-1 or TRAN-1 could not have been availed of as ER-1 was required to be filed up to 30.06.2017 and TRAN-1 up to 27.12.2017, by which time the appellant had not even paid the CVD/SAD for which the case for claim of refund. It is, therefore, evident that the said provision could not have been applied too in the present case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) of CGST Act, 2017, I find that the duties (CVD Addl. CVD) paid by the Noticee which results in Cenvat credit amount of Rs. 45,97,318/- has not become refundable in pursuance of an assessment or an adjudication proceeding instituted before, on or after the appointed day because, they have merely become eligible for said Cenvat after the amount in pursuance to assessment but it has snot become refundable to them under the existing law. Accordingly facts provisions of Section 142(8) (dable the Act cannot be made applicable to the of the present case. 16. In this regard, I find that the duty of which the refund has been claimed was in- fact paid on account of non-fulfilment of export obligation in respect of EPCG Authorisation as per its conditions. So, it is not a case of refund arising out in pursuance of an assessment or adjudication proceedings initiated whether before on or after the appointed day under the existing law, which is clearly specified as the prerequisite for claiming refund under the provision of sub-Section (8)(b) of Section 142 of the CGST Act, 2017. 17. In this case, even if the facts of the present case are examined in the context of provisions of Section 142(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 45,97.318/- (total of CVD of Rs.31.85.333/- plus SAD of Rs 14.11.985/-) and of Rs.3.93,661/- (total of CVD of Rs.2.86.207/- plus SAD of Rs. 1,07,454/-), thus contended that they were eligible for refund of said input tax credit in-terms of Section 142 of CGST Act, 2017. Before, I proceed further, I find that provisions of sub-section (1) of Section 11B of the said Act allows refund of duty of excise and interest, if any, paid on such duty , therefore, find that the provisions of Section 11B of the said Act nowhere allows refund of duty/ duties of Customs. As regards to the Appellant's contention that since the said inputs are used in the manufacture of goods cleared on payment of duty they are eligible for ITC (input tax credit) of such duty paid. To this, I find that the Adjudicating Authority has rightly pointed out that for refund of Cenvat credit paid on inputs under the said Act, the procedure prescribed for such refund is under Rule 5 of the said Cenvat Rules, which allow refund of Cenvat credit accumulated on account of export of final products under Bond/ without payment of duty, which is not the case in appeal before me. Further, I find that in para 2 of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1944. It is also important to note that Section 11B(2) of Central Excise Act, 1944 deals with the manner in which applications for refund under Section 11B(I) are to be dealt with as it uses the words such application which is clearly referable to Section 11B(I) of Central Excise Act, 1944. Further, the proviso to Section 11B(2) deals with situations of rebate of duty: unspent advance deposits; principles of unjust enrichment in cases where duty of excise is paid by manufacturer or borne by buyer and who have not passed on the incidence of such duty to any other person: and also where duty of excise is borne by any other class of applicant as the central government may notify in official gazette with a further proviso regarding unjust enrichment. 14. Having noted the rival contentions it may be appropriate at this juncture to draw attention to the Doctrine of Necessity which was discussed at length by the Hon ble Madras High Court in the case of M/s Ganges International Pvt Ltd., M/s SRC Projects Pvt Ltd., M/s Supreme Petrochemicals Ltd., vs. The Assistant Commissioner of GST Central Excise, Puducheery, the Union of India, The Assistant Commissioner of Central Taxes Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved of by various judicial/ quasi-judicial authorities. The Principal Bench of the CESTAT in Excise Appeal No. 50808 of 2020, 50809 and 50810 of 2020 (SM) in the case of M/s Mithila Drugs Pvt Ltd. vs. Commissioner, Central Goods and Service Tax vide Final Order Nos. 50157-50159/2022 had observed as under : 7. Having considered the rival contentions, I find that the payment of CVD and SAD subsequently during GST regime, for the imports made prior to 30.06.2017 is not disputed under the advance authorisation scheme. It is also not disputed that the appellant have paid the CVD and SAD in August, 2018 by way of regularisation on being so pointed out by the Revenue Authority. Further, I find that the Court below have erred in observing in the impugned order, that without producing proper records of duty paid invoices etc. in manufacture of dutiable final product, refund cannot be given. I further find that 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 Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be paid while seeking said redemption. These admitted facts are sufficient to hold that the appellant became entitled to avail Cenvat Credit of the CVD/SAD paid by him on the imported inputs in terms of Rule 3 of Cenvat Credit Rules, 2004 (CCR). 7. Apparently, the said Cenvat Credit could not be availed any more due to the erstwhile law i.e. Central Excise Act, 1944 being taken over by New GST Act, 2017. Perusal thereof shows that the Act contains a provision to take care of such unutilized credits of the assessee to be refunded to them in cash. The relevant provision is Section 142 of GST Act, with sub-section (3) thereof reads as follows:- (3) thereof reads as follows:- (3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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