TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1896
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.... accumulated for the reason that their products were exempted from payment of duty under Sub-rule 6(6) of the CENVAT Credit Rules 2004 which exempted the supplies to Mega /Ultra Mega Power Projects, SEZ, EOU, etc. besides for physical export from payment of excise duty and applicable cesses even when the cenvat credit has been availed on the inputs. The appellant have been a major supplier of power generation equipment over past several decades in as much as 85% installed capacity of power generation equipment has been contributed by the appellant. Besides the appellant have been executing orders for export, thus while credit of indigenous inputs and inputs services has been admissible to them even in respect of their clearances to Mega/Ultra Mega Power Project, SEZ and Physical Export, no duty of Central Excise or Cess was payable by them on bulk of their supplies, there by resulting in huge amount of un-utilizable accumulated credit being carried over the past several years. The appellants did not go for refund of unutilized cenvat credit in terms of Rule 5 of the Cenvat Credit Rules, 2004 on the expectation that they would be able to use the credits available with them on domest....
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....n be granted by cash as there is no provision in the central excise law which prohibits such credit. The learned Counsel has emphasized that the present situation is similar to such cases. The credits were validly earned and suddenly became unutilizable due to transition to GST regime where there was no provision to carry over these cesses. He further argued that judgment of Delhi High Court in the case of Cellular operator's case in W.P. (C ) no. 7837/2016 was no applicable as the relief claimed by the appellant is not by way of allowing the appellant to pay GST through these cesses which was the issue in Cellular Operator's case and which was not permissible under the new scheme, but the appellant had only sought refund of the accumulated cesses under the provisions old the regime. He further relied upon Hon'ble Supreme Court judgment in the case of Eicher Motors Vs. UOI [1999 (106) E.L.T. -3 (S.C.)] that the right to credit becomes a vested and duly crystallized right in favour of Assessee the moment input goods / services are received and by virtue of assessee paying the duty thereon by reimbursing the said amounts to the supplier of goods. "Para.-5 Thus the assessees became ....
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....cerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the rule cannot be applied to the goods manufactured prior to 16/3/1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods". 3.2 The Appellant's claim for refund of the Edn, HSE & KK Cess, as brought out in para-B of relevant facts springs from the factual matrix that the Right to Credit accrued to and got vested in Appellant by virtue of their payment of the value of the Cess to the manufacturer of who supplied the goods used by Appellant as inputs in the manufacture of their final dutiable products on clearance of which the Appellant could not utilize such credit on account that either goods were exported or supplied to deemed export contracts or on account of exemption carved out vide Notification dated 01/06/2015. That the credit balance constitutes a valuable and substantive right which stood cemented once the final goods in respect of inputs whereof the appellants availed the said credit, cannot be obliterated or taken away and the exchequer is bound to refund the same. He further argued that the Ho....
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....ry that in all subsequent proceedings the validity must again be challenged. It is sufficient if a party claims that the provision has to be read in the manner laid down by a judgment of this Court. In the light of the judgment of this Court in Eicher Motors case (supra), sub-rule 17 cannot apply to vested rights. Therefore to the extent that the goods have already been exported, prior to March, 1997, the assessee would be entitled to a refund". 3. Per contra the Ld. Departmental representative ha s argued that once there was no provision to carry over the cesses credit to the GST regime and nor there was any specific provision to refund the same under the scheme, the same would lapse. He relied upon the decision of larger bench of the Tribunal in the case of Steel Strips Vs. CCE Ludhiana reported as 2011 (269) E.L.T. 257 (Tri-LB) where the Tribunal has held teat claim of refund is not a vested right unless vested by law. Therefore, refund of cenvat credits could not be granted at the time of closure of a factory because there was no law which permitted such refund. 4. We have carefully gone through the rival arguments. There is no dispute that on 01/07/2017, the cesses credit va....