Refund of CVD/SAD on excess imports allowed in cash under transitional CGST provisions; unjust enrichment objection rejected

Appellant is entitled to cash refund of CVD/SAD paid on excess imports under the transitional provisions of the CGST Act because duties were cenvatable at the relevant time but credit is unavailable post GST; this legal basis is grounded in Section 142(3) and Section 142(6)(a) and supported by Tribunal and High Court precedents. The unjust enrichment objection was rejected on the facts: the refund was disclosed in financial statements and supported by a chartered accountant certificate that the duty incidence was not passed on, satisfying evidentiary requirements to negate unjust enrichment and permitting the refund in cash.

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Issues: (i) Whether the appellant is entitled to refund of CVD/SAD paid on excess imports (claimed under Section 27 of the Customs Act, 1962) in cash under the transitional provisions of Section 142(3) and Section 142(6)(a) of the Central Goods and Services Tax Act, 2017; and (ii) Whether the concept of unjust enrichment bars the refund in the present facts.

Analysis: The statutory framework invoked comprises Section 142(3) and Section 142(6)(a) of the Central Goods and Services Tax Act, 2017 which provide for disposal of refund claims arising under the existing law and require any amount eventually accruing to be paid in cash, and for refund of admissible credit in cash respectively. The claim relates to CVD/SAD paid on excess quantity imported under Advance Authorization licenses when, under the erstwhile regime, such duty was cenvatable. The claimants paid the duties for a period when cenvat credit rules existed; following the GST regime credit for such duty was no longer available, engaging the transitional refund provisions. Relevant precedents of this Tribunal and High Court interpreting Section 142(3) and related provisions recognise entitlement to cash refund where duties were cenvatable at the relevant time but credit cannot be availed post-GST. On unjust enrichment, the factual record includes disclosure of the refund receivable in the relevant financial statements and a chartered accountant certificate that the incidence of duty was not passed on to any other person, which addresses the criteria for denying refund on unjust enrichment grounds.

Conclusion: The refund application is admissible under Section 142(3) and Section 142(6)(a) of the Central Goods and Services Tax Act, 2017 and the claim for refund of CVD/SAD is to be allowed in cash; the objection of unjust enrichment is not sustained on the facts presented.

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