Mithila Drugs Pvt. Ltd. Vs. Commissioner, Central Goods and Service Tax,(CESTAT Delhi)
CESTAT finds that the payment of CVD and SAD subsequently during GST regime, for the imports made prior to 30.06.2017 is not disputed under the advance authorisation scheme. It is also not disputed that the appellant have paid the CVD and SAD in August, 2018 by way of regularisation on being so pointed out by the Revenue Authority. Further, I find that the Court below have erred in observing in the impugned order, that without producing proper records of duty paid invoices etc. in manufacture of dutiable final product, refund cannot be given. I further find that refund of CVD and SAD in question is allowable, as credit is no longer available under the GST regime, which was however available under the erstwhile regime of Central Excise prior to 30.06.2017. Accordingly, I hold that the appellant is entitled to refund under the provisions of Section 142(3) and (6) of the CGST Act.
Accordingly, I direct the jurisdictional Assistant Commissioner to grant refunds to the appellant of the amount of SAD & CVD as reflected in the show causes notices and also in the orders-in Such refund shall be granted within a period of 45 days from the date of receipt of order alongwith interest under Section 11BB of the Central Excise Act. The impugned orders are set aside.
FULL TEXT OF THE CESTAT DELHI ORDER
The issue involved is whether refund has been rightly rejected on the CVD + SAD paid for regularisation of advance licence (import licence), which have been deposited on 30.08.2018.
2. Brief facts of the case are that the Appellant is engaged in the manufacture of drugs such as Tinidazole, Metronidazole etc falling under Chapter 29 of the Central Excise Tariff Act, 1985. The final products manufactured by the Appellant were being exported and also cleared for domestic consumption on payment of applicable excise duty.
2.1 The Appellant imported raw material/inputs under Advance Licenses (Advance license no. 0310533722 dated 13.08.2009 relates to Excise Appeal no. E/50808/2020 & Advance license no. 0310519646 dated 13.05.2009 relates to Excise Appeal no. E/50809/2020 and Advance license no. 310555105 dated 10.01.2020 relates to Excise Appeal no. E/50810/2020). The imported raw material was used in the manufacture of finished goods. The finished goods were either exported out of India or were manufactured for the domestic market on which appropriate excise duty stood discharged.
2.2 That certain disputes took place between the shareholders and the matters were taken-up before the Hon’ble Company Law Board from 19.05.2011 to 18.02.2016. By a settlement, the matter was ultimately settled.
2.3 That Assistant Director General of Foreign Trade, Mumbai issued a deficiency letter dated 15.03.2016 under which the Appellant was informed that they have made excess import under the said Advance Licence. Under serial number 5 of the said letter dated 15.03.2016, the Appellant was directly to deposit the duty foregone on such excess import of raw material along with penalty.
2.4 Accordingly, the Appellant regularised the advance licence by depositing the BCD, CVD and SAD foregone, by making the necessary payments on 30.08.2018 (which relates to Excise Appeal No. E/50808/2020 and E/50809/220) and on 14.06.2018 (which relates to Excise Appeal No. E/50810/2020).
2.5 That the said payment of CVD + SAD was Cenvatable to the Appellant. However, since the same came to be paid on 30.08.2018 and 14.06.2018 respectively, by which time GST regime was in place, the Appellant filed refund claim dated 27.08.2019 under section 11B of the Central Excise Act 1944 to claim refund of CVD and SAD, which in the three matters are as follows:-
