Case Law Details
Vistex Asia Pacific P Ltd Vs Commissioner of CGST (CESTAT Mumbai)
In the recent case of Vistex Asia Pacific P Ltd Vs Commissioner of CGST (CESTAT Mumbai), the Tribunal ruled in favor of the appellant, allowing the refund claim for an amount of Rs.7,09,489/- for unutilized Cenvat credit accumulated due to exports.
The appellant filed for a refund of unutilized Cenvat credit accumulated in their Cenvat Account due to exports under Notification 5/2006-CE(NT) as amended by Notification No. 27/2012-CE(NT) r/w Rule 5. The Adjudicating Authority initially sanctioned only part of the refund and rejected the remaining amount. The decision was upheld by the Commissioner (Appeals).
However, the Tribunal noted an inconsistency in the application of rules by the revenue. An identical issue of the appellant for a previous period was granted a full refund by the same adjudicating authority. CESTAT asserted that a contrary view on an identical issue would lead to legal confusion and uncertainty.
The Tribunal agreed with the appellant that the correct calculation under rule 5 should permit the deduction of utilized credit out of the total/net Cenvat credit. The balance unutilized Cenvat credit should then be refunded.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal has been filed from the impugned Order dated 18.01.2019 passed by the Commissioner of Central Tax (Appeals-I), Mumbai by which the appeal filed by the appellant was rejected.
2. The period involved herein is July, 2016 to September, 2016; and the issue involved herein is about the calculation prescribed under the formula as per Rule 5 of Cenvat Credit Rules, 2004 r/w notification No. 27/2012-CE(NT) for calculating the admissible refund.
3. The appellants have filed the refund claim for an amount of Rs.7,09,489/- for unutilized Cenvat credit accumulated in their Cenvat Account due to exports in terms of Notification 5/2006-CE(NT) as amended by Notification No. 27/2012-CE(NT) r/w Rule 5 ibid. The Adjudicating Authority vide Order-in-Original dated 12.6.2017 sanctioned the refund of Rs.3,75,613/- and rejected the balance amount of Rs.3,33,876/- and the same was upheld by the learned Commissioner (Appeals) by way of impugned order.
4. I have heard learned Chartered Accountant for the Appellant and learned Authorised Representative for the Revenue and perused the case records including the written submissions/synopsis alongwith case laws placed on record. Identical issue of the Appellant herein for the immediate prior period i.e. April, 2016 to June, 2016 came up for consideration before the very same adjudicating authority 3-4 months prior to the passing of the Order-in-Original herein, in which the said authority vide Oder-in-Original dated 15.2.2017 granted refund to the appellant as per the calculation they are claiming under rule 5 ibid. The said order-in-original has also been placed on record by the learned Chartered Accountant during the course of hearing. Time and again it has been held by the Tribunal that the revenue is not permitted to take contrary view on identical issue because if they are permitted to do so then the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary. This contrary view of the very same adjudicating authority strengthens the submission of the appellant that they were not heard by the said authority before rejecting the refund partly. Had the said authority heard them properly then the Order-in-Original herein would have been passed in conformity with the earlier order of the same authority in appellant’s own case. Therein the appellant was permitted to deduct the utilized credit out of the total/net Cenvat credit and balance unutilized Cenvat credit was refunded to them, which according to me is the correct view. Applying the same on the facts of the instant matter, the total/net Cenvat credit is Rs.11,97,619/- whereas the credit utilized by is Rs.4,88,130/- and if we deduct the credit utilized from the total Cenvat credit then the balance would be [Rs.11,97,619 – Rs.4,88,130] Rs.7,09,489/-, which has been claimed by the appellant but rejected by both the authorities below. The lower authority has totally erred in deducting the utilized Cenvat credit i.e. Rs.4,88,130/- after getting the total refund amount i.e. Rs.8,63,743/- as per formula prescribed u/r.5 ibid. The first appellate authority also seems to have decided the appeal mechanically without properly looking into the issue and also the submission of the appellant that they were not heard by the lower authority.
5. In view of the discussions made hereinabove, the impugned order is set aside and the appeal filed by the appellant is allowed with consequential relief, if any.
(Pronounced in open Court on 13.06.2023)
