Case Law Details
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.
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