Refund in Cash, Not Credit: Tribunal Overturns Commissioner's Order

The Tribunal set aside the Commissioner (Appeals) order directing a refund claim to be credited in the Cenvat Credit account post-GST regime introduction. The Tribunal emphasized that refunds under the CGST Act, 2017 should be paid in cash, not credited to accounts. The Commissioner's decision caused unnecessary litigation for the appellant and was deemed contrary to the law. Consequently, the Tribunal allowed the appeal, reinstating the original decision to refund the amount in cash, highlighting the importance of complying with legal provisions for refund disbursement in the post-GST regime.

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Issues: Refund claim directed to be credited in Cenvat Credit account post-GST regime introduction.

In this case, the appellant appealed against an order where the Commissioner (Appeals) sanctioned their refund claim but directed it to be credited in their Cenvat Credit account after the introduction of the GST regime. The appellant, engaged in manufacturing excisable goods, had paid duty on zinc dross/ash under protest and filed a refund claim. The adjudicating authority initially sanctioned the refund claim in cash to the appellant. However, the Revenue appealed this decision, leading to the Commissioner (Appeals) directing the refund to be credited in the Cenvat Credit account post-GST regime implementation.

Upon hearing both parties, the Tribunal considered Section 142(3) of the CGST Act, 2017, effective from 1.7.2017, which stipulates that any refund due to the assessee regarding Cenvat credit, duty, tax, interest, or any amount should be paid in cash. The Tribunal noted that the Commissioner (Appeals) allowing the refund to be credited in the Cenvat Credit account was contrary to the law's spirit. By this action, the Commissioner (Appeals) unnecessarily embroiled the appellant in further litigation before the Tribunal, which was deemed unacceptable. Consequently, the Tribunal found no merit in the impugned order, setting it aside and restoring the adjudicating authority's original decision.

Therefore, the Tribunal allowed the appeal with consequential relief, emphasizing the importance of adhering to the clear provisions of the law, especially in the context of refund disbursement post-GST regime implementation.

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