2024 (5) TMI 190 - AT - Central Excise

Refund of CVD/SAD upheld under Section 11B Central Excise Act despite Revenue's challenge citing Sarvo Packaging precedent

Commissioner of Central Excise & Service Tax, Ahmedabad-I Versus Aculife Healthcare Private Limited

CESTAT Ahmedabad upheld appellant's entitlement to refund of CVD/SAD paid on 30.09.2020. Revenue challenged refund claim citing Sarvo Packaging Ltd. ... Refund of CVD/SAD paid - unable to avail and utilize the credit of CVD/SAD paid by them as payment was made on 30.09.2020 when no provision exist in GST regime to avail such credit - rejection of refund on the ground that at the time of payment of CVD and SAD, Cenvat Credit Rules were not exist, therefore neither the appellant can take the Cenvat credit nor the same is eligible for the refund - Section 11B of the Central Excise Act, 1944 - HELD THAT:- In the present case, the refund was made under the existing law i.e. section 11B of Central Excise Act, 1944 accordingly, the refund of SAD/CVD paid by the appellant which was cenvatable at the time when the said duty was payable, It is clearly eligible for refund under Section 11B read with Section 142(3) of CGST Act, 2017. Therefore, the appellant are legally entitled for the refund of CVD/ SAD. The Revenue has filed the appeal on the sole ground that the adjudicating authority has rejected the claim relying on the Single Member Bench decision in the case of this Tribunal decision in the case of Sarvo Packaging Ltd. There are number of judgments by this Tribunal itself which are contrary to the decision of M/S. SERVO PACKAGING LIMITED VERSUS COMMISSIONER OF G.S.T. AND CENTRAL EXCISE, PUDUCHERRY [2020 (2) TMI 353 - CESTAT CHENNAI]. Moreover, even after considering the Sarvo Packaging Limited decision, the Tribunal’s Single Member Bench in the case of SRI CHAKRA POLY PLAST INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX MEDCHAL – GST [2024 (1) TMI 927 - CESTAT HYDERABAD] after relying upon many other decision came to the conclusion that the appellant are entitled for the refund under Section 142(3) of CGST Act, therefore, the decision of Sarvo Packaging Limited stand departed. The impugned order is upheld. Revenue’s appeal is dismissed. Issues involved: Refund claim u/s 11B of Central Excise Act, 1944 for CVD/SAD paid by the appellant; Appeal against rejection of refund claim by adjudicating authority; Interpretation of Section 142(3) of CGST Act, 2017 for refund eligibility; Precedent value of judgments in deciding refund claims.Summary:Refund Claim u/s 11B:The appellant, engaged in manufacturing pharmaceutical products, imported goods against an advance license and paid CVD and SAD. They sought a refund of Rs. 1,16,02,346/- under Section 11B of the Central Excise Act, 1944, as they were unable to avail Cenvat credit post-GST regime. The adjudicating authority rejected the refund claim, prompting the appellant to appeal.Grounds of Appeal:The Revenue challenged the appeal, arguing that the Commissioner (Appeals) did not provide sufficient reasoning for allowing the refund claim. They contended that previous decisions relied upon by the Commissioner (Appeals) were accepted on low monetary grounds, questioning their finality.Counter-Arguments:The Respondent defended the Commissioner (Appeals)' decision, citing similar cases where refunds were granted. They argued that the absence of discussion on a specific case does not render the order illegal. Precedent value was debated, with reference to various judgments supporting the refund claims.Judgment:The Tribunal analyzed the case and found that the appellant paid CVD and SAD before the GST regime, making them eligible for Cenvat credit. Section 142(3) of the CGST Act, 2017 addressed situations where Cenvat credit could not be utilized, allowing for refunds under existing laws. The Tribunal upheld the refund eligibility under Section 11B, dismissing the Revenue's appeal. Precedent judgments were considered, with the Tribunal emphasizing the applicability of later decisions over earlier ones based on the principle of 'later is better.'Conclusion:The Tribunal affirmed the legality of the refund claim, highlighting the relevance of Section 142(3) of the CGST Act, 2017 in granting refunds for duties paid pre-GST regime. The decision reinforced the importance of precedent judgments in determining refund claims, ultimately dismissing the Revenue's appeal.