Assessee Entitled to Cash Refund of CVD & SAD Paid Post-01.07.2017: CESTAT

Assistant Commissioner (Review) Vs Shakti Pumps (I) Limited (CESTAT Delhi)

The case of Assistant Commissioner (Review) Vs Shakti Pumps (I) Limited recently brought a pivotal decision from the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi. This judgment addresses a significant issue concerning the entitlement of Shakti Pumps to a cash refund of CENVAT credit on Countervailing Duty (CVD) and Special Additional Duty (SAD) paid after the implementation of the Goods and Services Tax (GST) on July 1, 2017. The dispute revolves around whether Shakti Pumps was rightfully entitled to a refund in cash under the provisions of the Central Goods and Services Tax (CGST) Act, particularly following the transition from the Central Excise regime.

Background

Shakti Pumps (I) Limited, a manufacturer of submersible pumps, power-driven pumps, and other related systems, had historically claimed CENVAT credit for duties paid under the Central Excise regime. Before the GST regime commenced, Shakti Pumps was registered with the Central Excise department, availing CENVAT credits on inputs used in manufacturing final products.

With the introduction of the GST regime on July 1, 2017, the erstwhile Central Excise and Service Tax laws were subsumed under the CGST Act. This transition required businesses to adapt to new tax regimes, including the adjustment of credits and duties previously accounted for under the old system.