Case Law Details
MMD Heavy Machinery (India) Pvt. Ltd. Vs The Assistant Commissioner (Madras High Court)
The case of the petitioner in the present writ petition is that the petitioner had shut down its factory in Ambattur, Chennai in Tamil Nadu and shifted to Sri City, Andhra Pradesh during June 2016 much prior to implementation of GST. At that point of time, the petitioner had accumulated input tax credit under Cenvat Credit Rules, 2004 which had remained unutilized owing to the fact that the petitioner was pre-dominantly engaged in export of final products. Therefore, the petitioner orally requested the jurisdictional Assistant Commissioner of Central Excise (the 1st respondent) and the 2nd respondent to permit the transfer of accumulated input tax credit lying unutilized in its CENVAT Account to its new factory in Sri City, Andhra Pradesh in terms of Rule 10 of the CENVAT Credit Rules, 2004.
The sub-clause (ii) to proviso to Section 140(1) of the Central Goods and Services Tax Act, 2017 makes it very clear that credit shall not be allowed where such registered person has not produced all returns required under the existing law for the period of six months immediately preceding the appointed date.
Order-in-Original No.3/2017(AC) dated 10.11.2017 passed by the 1st respondent indicates that the petitioner had not mentioned/declared export clearances in its ER-1 Returns for the period commencing from January, 2015 ending with June, 2016. It is further noticed that the petitioner had exported goods for a assessable value of Rs.33,90,82,523/- without paying duty or executing proper bond under Rule 19 of the Central Excise Rules, 2002. The duty payable on the exported goods was determined as Rs.4,23,51,107/-. Thus, the credit of Rs.2,77,10,052/- which was transitioned would have been sufficient to cover a part of the duty liability on the exported goods and the petitioner could have availed rebate under Rule 18 of the Central Excise Rules, 2002 or to claim refund of input tax credit on the input used in the manufacture of export goods under Rule 5 of the CENVAT Credit Rules, 2004.
Strangely, the petitioner had not opted for any of the above while making export. The, fate of such input tax credit lying unutilized is to be examined in the light of the provisions of the Central Excise Act, 1944, Central Excise Rules, 2002, CENVAT Credit Rules, 2004 and the relevant notifications. It is assumed that the petitioner had opted neither to pay excise duty to claim rebate under Rule 18 of the Central Excise Rules, 2002 as it stood then nor in the alternative claimed refund under Rule 5 of the CENVAT Credit Rules, 2004. There is also no explanation forthcoming from the petitioner as to why the petitioner failed to opt for Rule 10(3) of the CENVAT Credit Rules, 2004.
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