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of <h1>Partial refund of Cenvat Credit allowed under Section 142(6)(a) for CVD and SAD payments</h1> <h3>Kobe Suspension Co Pvt Ltd Versus Commissioner of Central Excise, Goods & Service Tax, Faridabad</h3> CESTAT Chandigarh allowed partial refund of Cenvat Credit under Section 142(6)(a) of CGST Act, 2017. The appellant was granted refund of CVD amounting to ... Cash refund in terms of transitional provision under Section 142(6)(a) of the CGST Act, 2017 - denial of benefit of Cenvat Credit in terms of Rule 3(1) of Cenvat Credit Rules, 2004 - HELD THAT:- After considering the provisions of Section 142(6)(a) of the CGST Act, 2017, Section 11B(2) of the Central Excise Act, 1944 and Rule 3(1) of the Cenvat Credit Rules, 2004, the Tribunal in various decisions has allowed the refund of Cenvat Credit of CVD & SAD paid through various challans produced on record. It is also found that the Tribunal in the case of SRI CHAKRA POLY PLAST INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX MEDCHAL – GST [2024 (1) TMI 927 - CESTAT HYDERABAD] has considered the earlier judgments in the cases of M/S MITHILA DRUGS PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJASTHAN) [2022 (3) TMI 58 - CESTAT NEW DELHI], M/S MITHILA DRUGS PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJASTHAN) [2022 (3) TMI 58 - CESTAT NEW DELHI], M/S. ITCO INDUSTRIES LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2022 (6) TMI 1040 - CESTAT CHENNAI] and FLEXI CAPS AND POLYMERS PVT LTD VERSUS COMMISSIONER, CGST & CENTRAL EXCISE-INDORE [2021 (9) TMI 917 - CESTAT NEW DELHI]], and by following these case-laws on this issue, has allowed the refund of CVD & SAD. The appellant is entitled to refund of Cenvat Credit of CVD amounting to Rs.23,72,607/- and SAD amounting to Rs.10,21,081/-; and not the interest paid on delayed payment of duties as claimed by the appellant - Appeal allowed in part. Issues Involved:1. Denial of benefit of Cenvat Credit under Rule 3(1) of the Cenvat Credit Rules, 2004.2. Denial of cash refund under Section 142(6)(a) of the CGST Act, 2017.3. Eligibility of interest on delayed payment of duties for Cenvat Credit.Issue-wise Detailed Analysis:1. Denial of Benefit of Cenvat Credit under Rule 3(1) of the Cenvat Credit Rules, 2004:The appellant, engaged in manufacturing automotive parts, imported capital goods under the EPCG scheme but failed to meet export obligations due to lack of export orders. Consequently, they paid customs duties along with interest during the GST regime. The appellant claimed Cenvat Credit of these duties under Rule 3(1) of the Cenvat Credit Rules, 2004, which allows manufacturers to take credit of additional duty equivalent to excise duty paid on inputs or capital goods. The authorities denied this claim, arguing that the appellant did not meet the conditions for Cenvat Credit. The appellant contended that the duties paid via different customs challans were specified documents for Cenvat Credit under Rule 9(1).2. Denial of Cash Refund under Section 142(6)(a) of the CGST Act, 2017:The appellant sought a cash refund of Cenvat Credit under Section 142(6)(a) of the CGST Act, 2017, due to the transition to GST, which rendered the credit unusable. The authorities denied the refund, citing non-fulfillment of export conditions and reliance on CBIC Circular No. 20-10/11/2019-GST/1001 dated 22.06.2020. The appellant argued that this issue had been settled in favor of the assessee in multiple Tribunal decisions, including Sri Chakra Poly Plast India Pvt Ltd, Mithila Drugs Pvt Ltd, Clariant Chemicals India Ltd, ITCO Industries Ltd, and Flexi Caps & Polymers Pvt Ltd. These cases established that CVD and SAD paid post-GST regime were eligible for cash refunds under Sections 142(3) and 142(6)(a) of the CGST Act, 2017.3. Eligibility of Interest on Delayed Payment of Duties for Cenvat Credit:The authorities argued that the appellant was not entitled to Cenvat Credit of interest paid on delayed customs duties, as the credit was only for duties paid, not interest. The appellant contended that the interest was part of the duty payment regularization and should be considered for Cenvat Credit. However, the Tribunal found that while the appellant was entitled to a refund of Cenvat Credit for CVD and SAD, they were not entitled to credit for the interest paid on delayed payments.Conclusion:After considering the submissions and relevant legal provisions, the Tribunal concluded that the appellant was entitled to a refund of Cenvat Credit for CVD amounting to Rs. 23,72,607/- and SAD amounting to Rs. 10,21,081/-, but not for the interest paid on delayed payments. The appeal was partially allowed, granting the refund of Cenvat Credit but denying the interest component.(Order pronounced in the court on 04.06.2024)
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