Spacewood Furnishers Private Limited Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
The appellant had imported machines under Advance Licenses pre-GST. Due to cancellation of export orders post-GST implementation, they could not fulfill their export obligations. Consequently, in 2018 (post-GST), they paid the duties foregone at the time of import, which included Countervailing Duty (CVD), Special Additional Duty (SAD), Education Cess, and Secondary & Higher Education Cess. These duties, amounting to ₹9,96,439, were eligible for CENVAT credit under the pre-GST regime. However, as they were paid post-GST, the credit could not be transitioned into the GST regime.
The appellant filed a refund claim under Section 11B of the Central Excise Act, 1944, read with Section 142 of the CGST Act, 2017. The lower authorities rejected the claim, primarily arguing that the duties paid were ‘customs duties’ and not CENVAT credit or excise duty/service tax covered under Section 142(3) of the CGST Act, and alternatively, that they were ‘arrears of tax’ or not eligible for input tax credit post-GST.
The CESTAT set aside the impugned order dated 06.11.2020 and allowed the appeal. It directed the refund of ₹9,96,439 to M/s Spacewood Furnishers Private Limited, holding them eligible for the cash refund of the CENVAT credit paid by them, in terms of Section 142(3) of the CGST Act, 2017.
