Case Law Details
Oil States Industries India Pvt. Ltd Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
Refund to be granted in cash towards accumulated CENVAT credit on exports during Pre-GST regime
The CESTAT, Mumbai in the matter of M/s Oil States Industries India Pvt. Ltd v. Commissioner of CGST & Central Excise, Raigad [FINAL ORDER NO. A/85680 / 2022 dated August 5, 2022] has held that the assessee is entitled to get cash refund, if any, against CENVAT Credit available during Pre-GST regime as per provision contained in Section 142(3) of the Central Goods and Services Tax Act 2017 (“the CGST Act”).
Facts:
M/s Oil States Industries India Pvt. Ltd (“the Appellant”) had exported its manufactured articles and had accumulated CENVAT credit against exports made during the period October, 2013 and December, 2013 and filed an refund claim application for refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004 but that was rejected as time barred by the Original Authority without any notice being sent to the Appellant.
The Appellant preferred an appeal before the Commissioner of Central Excise (Appeals) (“the Respondent”) that vide Order-in-Appeal (“the Impugned Order”) dated February 16, 2016 rejected the appeal. Then, it went on appeal before a wrong forum namely Revisionary Authority, Government of India who dismissed the appeal for want of jurisdiction. Hence the present appeal that is admitted after condonation of delay of the period. The Appellant has not challenged the legality of the rejection of its refund application but only sought for re-credit of the debited CENVAT Credits after final confirmation of rejection the refund sought against accumulated CENVAT Credits on exports.
Appellant’s contention:
The amount is to be re-credited to the Appellant’s input tax credit account and paid to it in cash as contemplated in Section 142 of the CGST Act.
Issue:
- Whether the Appellant is eligible for the re-credit of the debited CENVAT Credits after final confirmation by the Respondent for rejection of the refund sought against accumulated CENVAT Credits on exports?
Held:
The CESTAT, Mumbai in [FINAL ORDER NO. A/85680 / 2022 dated August 5,2022] has held as under:
- The claimant is entitled to take back the credit of the difference between the amount claimed and amount sanctioned. The amount sanctioned being zero, the entire credit could have been taken back by the Appellant but such an action can only be initiated upon completion of the entire adjudication and appeal process or by way of its abandonment or else in the event of taking a re-credit, if Appellant Authority allows the refund, it would amount to acceptance of dual benefits in taking advantage of improper wordings in the notification that remained silent as to at what stage the claimant can re-credit the amount back to its account.
- Noted that, such a long waiting by the Appellant in not venturing into such an unethical practice exhibits the bonafideness of a law abiding national.
- Stated that, the Appellant is entitled to get cash refund of INR 35,52,543/- with applicable interest, if any, against CENVAT Credit available to its credit during Pre-GST regime as per provision contained in Section 142(3) of the CGST Act.
- Held that, the appeal is allowed and the Impugned order passed by the Respondent is hereby modified to the extent that Appellant is eligible to get cash refund of INR 35,52,543/- with applicable interest, if any, against unutilised CENVAT Credit and accordingly the Respondent is directed to pay the same within two months of receipt of this order.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Direction for Re-credit of the amount debited during filing of refund claim of unutilised CENVAT Credit of Rs.35,52,543/-, against exports as per provision contained in Rule 5 of the CENVAT Credit Rules, 2004 vis. a vis. Notification No. 27/2012-CX (NT) dated 18.06.2012, sought after denial of refund during the GST regime is the issue to be determined in this appeal.
2. Factual back drop of this case, in a nutshell, is that Appellant had exported its manufactured articles and had accumulated CENVAT credit against export made during the period October, 2013 and December, 2013. It had filed a refund claim application on 02.2015 for refund of accumulated CENVAT Credit of the above referred amount under Rule 5 of the CENVAT Credit Rules, 2004 but that was rejected as time barred by the Original Authority without any notice being sent to the Appellant. Appellant preferred an appeal before the Commissioner of Central Excise (Appeals), Mumbai-II that yielded no fruitful result. Then it went on appeal before a wrong forum namely before the Revisionary Authority, Government of India who dismissed the appeal on 12.02.2020 for want of jurisdiction. Hence the present appeal that is admitted after condonation of delay of the period in which Appellant prosecuted the appeal in wrong forum and listed for hearing out of turn as the issue had been settled by the Tribunal’s decision in M/s. Lupin Ltd. Vs. Commissioner of CGST, Customs and Central Excise, Bhopal [2019 (11) TMI 1126 – CESTAT, New Delhi] alongwith M/s. Alumatic Cans Pvt. Ltd. Vs. Commissioner of CGST, Kolhapur [2020 (12) TMI 431 – CESTAT, MUMBAI] and M/s. Sopariwala Exports Pvt. Ltd. Vs. CCE & ST, Vadodara-I [2020 (9) TMI 788-CESTAT, AHMEDA BAD.
3. I have heard arguments from both the sides covering jurisdiction of CESTAT in dealing with the matter and granting relief under Section 142 of the CGST Act and on grant of cash relief against pre-GST CENVAT Credits.
4. Concerning jurisdiction of this Tribunal there is a suggestion from the Respondent-Department side that since the issue relating to CENVAT Credit refund claim under CGST Act, 2017 vis-à-vis jurisdiction of CESTAT had been referred to the Larger Bench by the Chennai Bench of CESTAT in M/s. Bosch Electrical Drive India Pvt. on 16.09.2021, hearing of this appeal may be referred till the issue is settled by the Larger Bench. Such a suggestion cannot be accepted primarily for two reasons. First in M/s. Borse India Automotive Systems Pvt. Ltd. vide Appeal No. ST/85691/2019 this Tribunal had given a finding on 05.05.2022 that such referral to the Larger Bench was made without reference to provision contained in Section 174 of the CGST Act dealing with repeal and saving clauses which clearly stipulated that despite Amended Act in force, all proceeding concerning the repealed Act shall be continued under the said Act as if GST Act has not come into force and previous Act has not been amended on repealed. The second point for consideration is that issue has been settled through numerous decisions of this Tribunal, for which early hearing was granted to the Appellant by this Tribunal vide its order dated 11.04.2022.
5. The issue has been in a narrow compass here in this Tribunal. Appellant has not challenged the legality of the rejection of its refund application but only sought for re-credit of the debited CENVAT Credits after final confirmation by the Commissioner (Appeals) of its refund application rejecting the refund sought against accumulated CENVAT Credits on exports, as could be noticed from the prayer portion of Appellant’s appeal memo filed before the Commissioner (Appeals), it had specifically prayed for re-credit of the amount to the Appellant in case refund sought by it is not allowed but unfortunately no finding is available to the order passed by the Commissioner (Appeals) with reference to the judgement cited above. Learned Counsel for the Appellant submits that the said amount is to be re-credited to the Appellant’s input tax credit account and paid to it in cash as contemplated in Section 142 of the GST Act, 2017.
5. In response to such submissions, learned Authorised Representative for the Respondent-Department submits that there is no requirement of any order from the Commissioner (Appeals) in view of express provision available in sub-Para (i) of Para-2 of Notification No. 27/2012-CX (NT) dated 18.06.2012 and in view of the Hon’ble Supreme Court judgments given in Smith Kline Beecham’s case in the event by no finding by the Commissioner (Appeals), Tribunal can only remand the matter it for reconsideration.
6. I have gone through the submissions, the relevant notification, relied upon case laws and the written note of the submissions. It is a fact that sub-para (i) of Para-2 of Notification No. 27/2012-CX (NT) dated 18.06.2012 permits the claimant to take back the credit of the difference between the amount claimed and amount sanctioned. Here amount sanctioned being zero, the entire credit could have been taken back by the Appellant but such an action can only be initiated upon completion of the entire adjudication and appeal process or by way of its abandonment or else in the event of taking a re-credit, if Appellant Authority allows the refund, it would amount to acceptance of dual benefits in taking advantage of improper wordings in the notification that remained silent as to at what stage the claimant can re-credit the amount back to its account. Such a long waiting by the Appellant in not venturing into such an unethical practice exhibits the bonafideness of a law abiding national. More importantly, going by Section 11 of the CPC if any relief is sought from the Court of Law and it is not expressly granted, it is deemed to have been refused. Therefore, Appellant has got every right to prefer an appeal before this Tribunal against such deemed refusal and to get the relief to which it is entitled to otherwise also. I am, therefore, of the considered view that Appellant is entitled to get cash refund of Rs.35,52,543/- with applicable interest, if any, against CENVAT Credit available to its credit during pre GST regime as per provision contained in Section 142(3) of the CGST Act. Hence the order.
ORDER
7. The appeal is allowed and the order passed by the Commissioner of Central Excise (Appeals), Mumbai-II vide Order-inAppeal No. CD/185/Bel/2016 dated 16.02.2016 is hereby modified to the extent that Appellant is eligible to get cash refund of Rs.35,52,543/- with applicable interest, if any, against unutilised CENVAT Credit and the Respondent-Department is directed to pay the same within two months of receipt of this order.
(Order pronounced in the open court on 05.08.2022)
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