Advance Micro Fertilizers Pvt. Ltd. Vs Commissioner of Central Excise (CESTAT Delhi)
A manufacturer’s appeal challenging the rejection of a refund claim for Cenvat credit, amounting to Rs. 2,67,659/-, has been allowed by the Tribunal. The original rejection was based on grounds of the claim being time-barred and hit by unjust enrichment.
The appellant, engaged in the production of various agricultural chemicals and disinfectants, had deposited service tax under the reverse charge mechanism. This amount, Rs. 2,67,659/-, was eligible for Cenvat credit under the Cenvat Credit Rules, 2004. However, with the advent of the Central Goods and Service Tax (CGST) Act, 2017, the appellant faced challenges in availing this credit.
The company attempted to carry forward the credit, including service tax paid in June 2017 but accounted for in July 2017, through the TRANS-I Form under Section 140 of the CGST Act, 2017. Scrutiny of the TRANS-I records by the authorities indicated that the appellant had “wrongly carried forward/transitioned” the Cenvat Credit amount as Input Tax Credit (ITC) based on a GAR–7 challan for service tax deposited under reverse charge after July 7, 2017.
Subsequently, a show cause notice dated August 12, 2021, was issued to the appellant, demanding the said amount. In response, the appellant filed a refund claim on September 23, 2021, under Section 11B of the Central Excise Act, 1944, arguing that the amount was available as credit but could not be availed due to the GST regime’s introduction.
