Transitional refund of unutilised CENVAT credit allowed in cash for pre-GST exports, with applicable interest.

A claimant whose refund of unutilised CENVAT credit on pre-GST exports was rejected was held entitled to cash refund in the transitional regime. The Tribunal noted that the relevant refund notification allowed re-credit of the difference between the amount claimed and the amount sanctioned, and that a zero sanction effectively left the debited amount available for re-credit. It further held that Section 142(3) of the CGST Act, 2017 supported cash refund of the pre-GST credit amount, and that Section 174 did not bar or defer such relief. The rejection order was modified and refund with applicable interest was allowed.

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Issues: Whether the appellant was entitled to cash refund of the amount debited while filing the refund claim of unutilised CENVAT credit against exports, and consequential payment with applicable interest, under the transitional regime.

Analysis: The claim arose from exports made in the pre-GST period and the refund application under Rule 5 of the CENVAT Credit Rules, 2004 was rejected. The decision notes that the relevant notification permits the claimant to take back the credit of the difference between the amount claimed and the amount sanctioned, and that a zero sanction effectively left the entire debited amount available for re-credit. The Tribunal further held that, in the transitional context, Section 142(3) of the Central Goods and Services Tax Act, 2017 supported grant of cash refund of the pre-GST credit amount, and the saving framework under Section 174 of the Central Goods and Services Tax Act, 2017 did not justify deferring the relief.

Conclusion: The appellant was entitled to cash refund of Rs. 35,52,543/- with applicable interest, if any, and the rejection order was modified accordingly.

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