Case Law Details
ITCO Industries Ltd. Vs The Commissioner of GST & Central Excise (CESTAT Chennai)
Brief facts of the case are that the appellants obtained two advance authorizations dated 29.06.2016 & 05.01.2017 issued by the Additional Directorate General of Foreign Trade, Bengaluru. Against such advance authorizations, the appellant imported raw materials without payment of duty. The appellants did not meet the export obligation and consequently a deficiency letter dated 15.03.2019 was issued to them directing them to regularize excess import of inputs made by them. Thereafter, a demand notice was issued by the office of the Commissioner of Customs, Chennai-IV for non-fulfilment of export obligation under the advance authorizations issued to them. The appellant then paid Customs duties along with CVD and Special Additional Duty (SAD) with applicable interest vide T.R. Challan dated 04.04.2019.
Meanwhile, G.S.T was introduced with effect from 01.07.2017 and the appellants were unable to avail input credit of CVD and SAD paid by them. They were also not able to transfer such credit to GST regime to TRAN 1 credit as the date of filing TRAN 1 procedure had expired on 27.12.2017. They therefore filed refund claim of Rs.9,76,684/- and Rs.3,07,305/- in regard to above appeals.
After the introduction of GST, the appellant could not avail cenvat credit of the duties paid by them which, otherwise, they would have been eligible. The appellant has filed refund claim of the eligible credit of the CVD and SAS paid by them. Section 142 (3) of G.S.T Act, 2017 provides that every refund claim has to be processed under the existing law and has to be allowed in cash.
From the narration of facts, it can be seen that Department has rejected the claims invoking Rule 9 (1) (b) of Cenvat Credit Rules, 2004. The said provision has already been reproduced above. The Department is of the view that credit is not eligible as appellant has paid the duties only after issuing a demand notice. On perusal of the alleged demand notice, it is merely in the nature of an intimation letter and has not been issued invoking any provisions of Customs law or Excise law. Further, in such intimation also, there is no allegation of any fraud, collusion or suppression of facts with intent to evade payment of duty. There is no evidence placed before me to establish that the duties were paid after adjudication and rendering a finding of fraud, collusion or suppression of fact with intent to evade payment of duty. In such circumstances, the credit cannot be denied. I hold that the appellant is eligible for credit of CVD and SAD paid by them.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
