Solara Active Pharma Sciences Ltd. Vs Commissioner of CGST (CESTAT Mumbai)
Undisputedly in the present case appellant had filed a refund claim with the jurisdictional Assistant Commissioner claiming refund of Rs 8,59,420/- on 09.02.2017. The refund claim was adjudged in favour of appellants by the said authority vide order dated 05.05.2017 to the extent of Rs 8,47,496/-, but instead of allowing the refund in cash, the refund was allowed by the Assistant Commissioner in the CENVAT Credit account of the appellants. As per the order of the Assistant Commissioner, appellants availed the CENVAT Credit in their book of accounts on 24.05.2017, having taken the credit in their book of accounts the entire issue was settled and the position whereby appellants had paid certain amounts from their credit account as per the direction of the officers, restored back.
However appellant suo motto on 01.06.2017 reversed the credit taken in their book of accounts on 24.05.2017, without any directive or prompting by the jurisdictional authorities as they proposed filing of appeal against the order dated 05.05.2017. Along with the synopsis dated 28.10.2021 filed by the appellant and received in registry on 01.11.2021, appellants have filed a detailed date chart leading to the present appeal.
In the synopsis dated 16.02.2022 filed by the Appellant, received in registry on 17.02.2022, Appellant counsel has specifically stated, “Without prejudice to the facts and circumstances that in the present case, the cash refund sought was made under section 11 B of CEA and not under Rule 5 of CCR {Specific facts and grounds for cash refund have been explained in the ground of appeal} in the grounds of appeal. In the following case laws it has been consistently held that EOU’s are also entitled to cash refund under Rule 5 of CCR, 2004.” I do not dispute that EOU’s can claim cash refund in terms of Rule 5 of CCR, 2004. In fact Rule 5 is only for the cash refund of the accumulated credit on account of goods exported under bond or letter of undertaking. Admittedly the present case is not in respect of any claim made for the refund of accumulated credit as per Rule 5, but is claim made under Section 11B for the duty erroneously paid under protest as per the direction of the departmental officers from the CENVAT account. It was also not the case that when the order for refund was made i.e. 05.05.2017 and when they had taken the credit they could not have utilized the same on account of closure of business etc. They were ongoing concern and were in position to avail the said credit. Further on introduction of the Good and Service Tax they were even permitted to carry forward the said credit to that regime. In my view appellants have by reversing the credit and filing the appeal subsequent to introduction created an instrument just to en-cash the CENVAT credit by resorting to Section 142 (6) (a) of the CGST Act. Such instruments should not be allowed.
In my view the appeal filed by the appellant before the Commissioner (Appeal) is nothing but a colorable device created by the appellant to claim the benefit which was not due. All could have been avoided and appellant could have carried forward the Cenvat Credit availed by them in their book of accounts on 24.05.2017 as per the order dated 05.05.2017 to the GST regime. But it is also settled principle in law that nobody should be allowed the benefit of his own wrongs.
Since it is the submission of the appellant that the present refund claim has been filed by them under Section 11B, the issue of admissibility of interest needs to be adjudicated in terms of Section 11BB. Since both the authorities have considered the request as per section 11 BB and thereafter rejected the claim to interest in my view appeal should fail on this account also.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal is directed against order in appeal No PVNS/206/APPEALS THANE/TR/2018-19/4766 dated 13.08.2018 of the Commissioner (Appeals) GST and Central Excise, Thane. By the impugned order, the Commissioner (Appeals) has held as follows:
“8.1 The appellant’s plea that since this appeal was filed prior to introduction of GST relevant provisions under GST law provide for payment of refund in cash is not acceptable as the Refund claim was filed before introduction of GST and the impugned order in original has also allowed the refund claim before the introduction of GST. Only appeal with Commissioner (Appeal) is filed after introduction of GST i.e. on 13.07.2017. Being refund itself was allowed before the introduction of GST, provisions of Section 142(3) of the Central Goods and Service Tax Act, 2017, will be not applicable to the instant case of the appellant and appellant is not entitled for the cash refund as requested. Hence, I agree with adjudicating authority, as regards to sanction of Refund of Rs. 8,47,496/- by way of credit in their cenvat account. Held accordingly.
8.2 The appellant has also relied upon the case law of 2010 (259) ELT. 713(Tri-Del) CCE, Jalandhar V/s. Kochar Sung-Up Acrylic Ltd. The above judgement is not applicable in this case as the facts are different from the present case. I agree with the findings of the adjudicating authority. Held accordingly.
I observe that the appellant has contended in the appeal memo that in the instant case interest is admissible from the date of payment of duty.
9.1 [ have gone through the provisions of Section 11BB of the Central Excise Act, 1944 which states that the interest is chargeable when refund is not made within three months from the date of receipt of application. The adjudicating authority has therefore rightly held that the appellant is not eligible for interest on the said refund amount as the period of three months from the date of filing of refund has not yet expired. The appellant has also relied upon the case law of Swastik Metals V/s. Union of India 1990(49)ELT.45(Raj) The above case law is not applicable to the present case as the same has been dissented by the Hon’ble High Court of Gujarat. I agree with the findings of the adjudicating authority. Held accordingly.
In view of the above, the impugned order is upheld and appeal filed by the appellant is rejected.”
2.1 Appellant is an 100% Export Oriented Unit. They filed a refund claim for Rs.8,47,496/- on 09.02.2017, in relation to duty deposited by them under protest. The protest and the show cause notice issued to them in respect of this duty deposited under protest was adjudicated the Superintendent, vide his Order-In Original No. 11/Supdt./2016 dtd. 30.12.2016 dropping the demand notice.
2.2 The refund claim was considered by the jurisdictional by the original authority and adjudicated in favour of the appellant vide his order dated 05.05.2017 stating as follows:
“10. Further, in the instant case, the claimant has asked for cash refund along with interest from the date of deposit in terms of Section 11BB of Central Excise Act, 1944, However, I find that the amount of refund claimed had been initially paid through Cenvat Credit Account and therefore, it would suffice if the same is allowed as refund by way of credit in the claimant Cenvat Credit Account. And regards the Interest under Section 11BB of Central Excise Act, 1944, the claimant is not eligible for Interest on the refund amount, since as per Section 11BB the interest is chargeable when refund is not made within three months from the date of receipt of application. In view of the above provisions, 1 find that, the claimant is not eligible for interest on the said refund amount as the period of three months from the date of filing of refund claim has not yet expired.
In view of the above findings. I Pass the following order:
ORDER
I hereby sanction the refund claim of Rs.8,47,496/- (Rupees Eight lakh forty seven thousand four hundred ninety six only) claimed by the claimants, as per Section 11B of the Central Excise Act, 1944. by way of credit in their Cenvat Credit Account.”
2.3 Aggrieved by the order of the Assistant Commissioner, appellants preferred the appeal before the Commissioner (Appeals) which was rejected by the impugned order and hence this appeal.
3.1 I have heard Shri V Ravindran, Advocate for the Appellant and Shri Sanjay Hasija, Superintendent, Authorized Representative for the revenue.
3.2 Arguing for the appellants learned counsel submits-
> The denial of refund claim in cash to them by the impugned order is contrary to the provisions of Section 142 (3) and 142 (6) (a) of Central Goods and Service Tax, Act, 2017.
> Section 2 (10) of the said Act defines the “ ‘Appointed day’ to mean the date on which the provisions of this Act shall come into force.”
> In following decisions the issue has been adjudicated in the favour of appellants:
