AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 433
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....mstances of this case, is the appellant entitled to refund of the CENVAT credit? 2. Excise duty is levied on manufacture of goods under Central Excise Act, 1944 and Service Tax is levied under Finance Act, 1994. Both these Acts provided for CENVAT credit of inputs and input services under CENVAT Credit Rules, 2004. Both these Acts have been superseded by the Central Goods and Services Tax, 2017 which merged both these taxes along with several other into a comprehensive GST. After the CGST Act, 2017 came into force, only GST is levied on both manufacture of goods and on provision of services. GST also provides for Input Tax Credit similar to the CENVAT. 3. To enable switch over from the previous enactments to the CGST Act, 2017, Chapter XX of this Act has Transitional Provisions. Section 140 of this chapter provides that the assessee can take credit of his CENVAT credit lying in balance in their account just before the CGST Act came into force as input tax credit under the CGST Act. The present case is one where some credit of CENVAT could have been taken by the appellant in their account and transferred to their new account as input tax credit but they did not. They requested the....
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.... taken back the credit of Rs. 14,17,901/- which was rejected. After losing their appeal before the Tribunal, the appellant has again represented to the lower authority for refund of this amount in cash. As the issue had already been decided by CESTAT, the lower authority rejected the request of the appellant for refund. This rejection was communicated to the appellant by Assistant Commissioner vide letter No. V/30/13/2016-17-Misc(Ref)/60, dated 09.02.2018 and reiterated vide their letter bearing the same number, dated 22.05.2018. 6. While the proceedings of appeals against partial rejection of refund of CENVAT under Rule 5 were going on, the Central Excise Act and Service Tax Act have been superseded by the Central Goods Service Tax Act 2017. This Act, inter-alia, provides for transfer of CENVAT Credit lying in balance as input tax credit under CGST Act, under Section 140 and some transitional provisions under section 142. Section 142 of CGST Act 2017 deals with transitional provisions which is reproduced below: "142. (1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appoi....
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....1944: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. (4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. (5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anythin....
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....o 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 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. (8) (a) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act; (b) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as ....
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....within six months from the appointed day: Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months: Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act, and are returned after a period specified in this sub-section: Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within a period specified in this sub-section. (13) Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under any law of a State or Union territory relating to Value Added Tax and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day. Explanation.--For the purposes of this Chapter, the expressions "capital goods", "Central Value Added Tax (CENVAT) credit", "first stage dealer", "second sta....
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.... the same, I am of considered view that the appeal does not merit favourable consideration and is liable to be rejected." Hence, this appeal. 8. Ld. Counsel for the appellant would submit that they were entitled to take credit of CENVAT back in terms of Notification No. 27/2012- CE(NT), dated 18.06.2012, when the refund was rejected but they had not done so because they wanted to pursue the appeal before the first appellate authority and before this Tribunal. Had they taken credit of CENVAT, the same could have been transferred as input tax credit under Section 140 of the CGST Act 2017. The CENVAT Credit account has already been closed with the introduction of CGST Act and since they had failed to take the credit before the introduction of CGST Act, they could not take back the credit of the amount. It would be unfair for them to lose the credit for this reason and therefore this amount may be refunded to them in cash. He relied on the judgment of Hon'ble Tribunal of Chandigarh in the case of Great India Steel Fabricators vs. CCE&ST, Panchkula [2019(3)TMI 103- CESTAT Chandigarh] in which it was held that in terms of Section 142 of CGST Act 2017, sanction of all refund claims has....
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....e introduction of CGST Act 2017 which was held to be incorrect in terms of Section 142 (3) of CGST Act 2017. The present case is different. No amount of refund has been sanctioned as credit to CENVAT account. Entire refund was sanctioned in cash or rejected. When the CENVAT credit is rejected, proviso to Section 142(3) of CGST Act, 2017 applies and the amount so rejected lapses. I have also considered the case of Castrol India Limited (supra). It was not in the context of the transition post introduction of CGST Act. 11. I now proceed to decide the issues set out in para 1 above. a) Whether, after claim of the appellant for refund of CENVAT in cash under Rule 5 of Cenvat Credit Rules, 2004 was rejected by the Tribunal, the lower authority give such refund as requested by the appellant? Judicial discipline demands the lower authority follows the decision of the higher authority. Once it is decided by the CESTAT that the appellant is not entitled to refund of some amount of the CENVAT credit under Rule 5 of the CCR, 2004, the lower authority cannot sanction such refund as it would constitute judicial indiscipline. Therefore, the lower authority was correct in rejecting the request....