Refund - Pre-Deposit

[Adarsh Gupta]

Dear Sir's,

A Pre-Deposit was made using CENVAT and now appeal has been decided in favour of the company. The company has filed a refund application for the pre-deposit. Whether refund of CENVAT can be claimed in CASH?

Regards,

ADARSH GUPTA

[Rajagopalan Ranganathan]

Sir,

If the assessee is in a position to utilize the credit then refund will be granted in cash. Only when the factory is closed or become fully exempted from payment of duty then the refund can be given in cash.

[Rajagopalan Ranganathan]

Sir,

Please read if the assessee is able to utilize the credit then refund will not be granted in cash. The typographical error is regretted.

[KASTURI SETHI]

In Central Excise Act/Rules, there was no provision of refund of Cenvat credit in cash on account of closure of the factory. This issue was under litigation. There are so many case laws in favour of the assessees. One case law based on the judgement of Supreme Court and Karnataka High Court is appended below :-

2018 (15) G.S.T.L. 257 (Raj.) = 2018 (8) TMI 1169 - RAJASTHAN HIGH COURT WELCURE DRUGS & PHARMACEUTICALS LTD. Versus COMMR. OF C. EX., JAIPUR

[SHIVKUMAR SHARMA]

Yes,You are eligible refund in cash agst. Pre-Deposit made for filling Appeal.

Please refer Section 142(6)(a) of CGST Act 2017 effective from 01.07.2017 which read as under.

Every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944.) and the amount rejected, if any, shall not be admissible as input tax credit under this Act:

AI Summary

Refund in cash of CENVAT pre-deposit allowed where admissible credit is determined under transitional CGST provision. Whether a pre-deposit made using CENVAT credit may be recovered in cash turns on admissibility and utilisa tion of the credit: where the assessee can utilize the credit, refund in cash is not ordinarily available and cash refunds arose mainly on closure or full exemption; judicial decisions supported cash refunds in certain cases. A transitional statutory provision directs that in appeal or review proceedings initiated before, on or after the appointed day any amount of credit found admissible shall be refunded in cash, subject to specified exceptions, while rejected amounts are not admissible as input tax credit.