Tribunal Orders Refunds of Special Duty & Countervailing Duty, Correcting Previous Court Error

The Tribunal allowed the appeals, directing the Assistant Commissioner to grant refunds of Special Additional Duty (SAD) and Countervailing Duty (CVD) within 45 days with interest under the Central Excise Act. The Tribunal held that the appellant was entitled to a refund under the CGST Act provisions despite the inadmissibility of credit post-GST implementation for imports made pre-GST under the advance authorization scheme. The Court below erred in rejecting the refund claims, as credit was available under the previous Central Excise regime but not under GST.

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Issues:
Refund rejection on CVD + SAD paid for regularisation of advance licence post-GST implementation.

Analysis:
The appellant, engaged in manufacturing, imported inputs without payment of Customs duty against an Advance Licence. Upon failure to fulfill export obligations, they paid Customs duties post-GST implementation. The issue was whether they could claim cenvat credit of CVD and SAD. Show cause notices were issued proposing refund rejection, citing inadmissibility of credit under CGST Act. The Court below rejected the refund claims.

The appellant appealed to the Commissioner (Appeals), who noted that Cenvat Credit Rules allow credit of CVD and SAD paid under the Customs Tariff Act but observed that post-GST implementation, such credit couldn't be availed. Import under advance authorisation was conditional, and availing credit upon failure would defeat the purpose. Thus, the refund claims were rejected.

The Tribunal heard the parties and reviewed the case. It acknowledged the payment of CVD and SAD post-GST for imports made pre-GST under the advance authorisation scheme. The Court below erred in demanding detailed records for refund approval. As credit was no longer available under GST but was under the previous Central Excise regime, the Tribunal held the appellant entitled to a refund under CGST Act provisions.

Consequently, the Tribunal directed the Assistant Commissioner to grant refunds of SAD & CVD within 45 days with interest under the Central Excise Act. The impugned orders were set aside, and both appeals were allowed.

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