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TMI Blog2025 (2) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... 22-23 dated 09.02.2023 CHD-EXCUS-001-LDH-APP-01-2022-23 dated 08.02.2023 OIO 07/AC/R/2020 dated 12.02.2021 06/AC/R/2020 dated 28.10.2020 SCN RFND-ST/12/2019-DIV-GST-PHG/24377/2019 dated 27.06.2019 RFND-ST/31/2020-DIV-GST-PHG dated 31.07.2020 2. Briefly the facts relating to Appeal No. 60246/2023 are that the appellant is a manufacturer of BOPP Films and was registered with the excise and Service Tax regime during pre-GST regime. Further, during the period between April 2017 and June 2017, the appellant imported goods on CIF basis, whereby the freight costs were paid by the overseas supplier to the shipping line, and it formed part of the overall transaction value of the imported goods. The appellant paid the service tax of Rs. 5,06,860/- on Ocean Freight under RCM along with delayed payment of interest during the period between August 2018 and October 2018 for the period April 2017 to June 2017 and claimed the Cenvat credit under Cenvat Credit Rules, 2004. After coming into the force of GST w.e.f. 01.07.2017; the appellant could not carry forward the Cenvat credit post-GST regime and therefore, the appellant filed refund application on 28.03.2019 under Section 11B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer directly or indirectly in or in relation to the manufacture of final products qualify as input service for the manufacturer. Ld. consultant also relied upon the Rule 3(1)(ixb) of the Credit Rules which allows availment of Cenvat credit of service tax leviable u/s 66B of Finance Act, 1994. He further submits that CBIC vide Para 2.4 of the Circular No. 206/4/2017-Service Tax dated 13.04.2017 has also clarified that the Importer of goods has been allowed Cenvat credit on the basis of challan of payment of service tax by the said importer on the services provided by a foreign shipping line to a foreign charter with respect of goods destined to India. 5. The Ld. consultant further submits that section 174(2) (c) of the CGST Act clearly provides that the repeal of the Central Excise Act, 1944 will not affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Act. He further submits that appellant's right to claim Cenvat credit has accrued once the service tax on input services was paid under RCM, and this right is not extinguished merely because such payment was made after 01.07.2017. He also submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t carried forward any credit of such tax using the provisions under Section 140. 7. Learned DR further submits that specific miscellaneous transition provisions have been made under the Act itself and therefore as claimed by the appellant that they were otherwise entitled for refund under Section 142(3) of the said Act, has to be examined in terms of the provisions under the said Section and Sub-Section. He also submits that the refund claim filed under Sub-section 3 has to be disposed off in accordance with the provisions of the existing law and the Section 142(3) does not independently provide any right to claim refund of any unutilized cenvat credit without fulfillment of conditions prescribed under the existing law. In support of his submissions, learned DR relied upon the following decisions: * Jharkhand High Court decision in the case of Rungta Mines Limited [Order dated 15.02.2022] * CESTAT Bangalore order dated 28.03.2023 in the case of M/s. Systems Advisors Software Services Pvt Ltd * CESTAT Hyderabad decision dated 31.07.2024 in the case of M/s. M/s JSW Cement Ltd. * CESTAT Hyderabad decision dated 31.07.2024 in the case of M/s. M/s CAD Vision Engineers Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, liability etc., under the existing laws were to be disposed off in terms of provisions made in the Act. In so far as it relates to refund of cenvat credit, there are apparently three options available post introduction of GST Laws. Firstly, under Section 140 where specific and eligible cenvat credits under existing law were entitled for being carried forward under the new regime and to be taken as credit in their electronic ledger under the Act, subject to provisions under the relevant rules and procedures. The second provision was in terms of Section 142(3) and third under Section 142(9)(b). A plain reading of the provisions would indicate that, interalia, refund of any amount of tax or cenvat credit has to be disposed off in accordance with the provisions of the existing law and any amount eventually accruing to him shall be refunded to be paid in cash only, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of Sub-section 2 of Section 11B. Therefore, it is obvious that refund has to be examined first in terms of the relevant provisions, as it existed under the existing law, in this case Cenvat Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the Learned DR, Division Bench of CESTAT, Hyderabad, in the case of CCE, Tirupati Vs Rani Plastic Pipe Industries [2020 (6) TMI 356-CESTAT, Hyd] has held that there is no provision in the CCR for refund of cenvat credit if the assessee is not able to utilize it for any other purpose, such as factory being closed and that it was also held that the Larger Bench of Hon'ble High Court of Bombay had held that no refund can be sanctioned under Section 118 if the assessee is unable to utilize cenvat credit on account of closure of manufacturing activities. Similar view was also held by the Division Bench of CESTAT in the case of Finex Industries Pvt Ltd., Vs CCE, which also examined, interalia, the Judgments in the case of Union of India Vs Slovak India Trading Co. Pvt Ltd., [2006 (201) ELT 559 (Kar)) and Union of India Vs Slovak India Trading Co. Pvt Ltd., [2008 (223) ELT A 170 (SC)]. 13. Therefore, essentially when there is no provision in the law either under the Cenvat Credit Rules 2004 or in the Finance Act 1994 to allow cash refund, for such accumulated credit, Section 142(3), per se, cannot make it an eligible refund merely because the appellant have not been able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act saves the right acquired, accrued or vested under the existing law and does not create any new right which never existed on the appointed day ile on 01.07.2017 under the existing law. 47. The argument of the petitioner by referring to second proviso to section 142(3) of CGST Act that it indicates that section 142(3) would apply to the situations where the assessee has failed to take transitional credit under section 140(1), is also devoid of any merits. The second proviso only indicates that if the assessee has taken transitional credit he will not be entitled to refund. Certainly, an assessee cannot simultaneously claim transitional credit as well as refund of the same amount. The second proviso to section 143(2) cannot be said to be an eligibility condition to claim refund but is only a condition which governs refurid as an assessee cannot be permitted to have transitional credit as well as refund of the same tax amount. 48. Section 140(5) applies under the circumstances where input services are received after the appointed day but the tax has been paid by the supplier under the existing law within the time and in the manner prescribed with a further condition that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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