AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 65
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.... 140 of the CGST Act, 2017 (herein after referred to as 'the Act'). However, they disclosed said input service credit in their revised service tax return for the quarter April to June, 2017 filed by them on 22.09.2017. The refund was filed in terms of provision under Section 142(9)(b) of the Act. On going through the refund claim filed, the department felt that the refund consists of two components viz., the Central Excise input credit amounting to Rs.14,40,627/- and the Service Tax credit component amounting to Rs.34,73,588/-. In so far as the Central Excise credit component was concerned, the department, primarily on the ground that since no revised ER-1 return has been filed, as is required under provisions of Section 142(9)(b) of the Act, held that they were not entitled for refund of the same. In so far as the Service Tax credit component was concerned, the department felt that the said refund does not fit into the provisions under Section 142(9)(b) of the Act. Additionally, they felt that this component is also hit by time bar as well as unjust enrichment as required under Section 11B(2) of the Central Excise Act, 1944. 3. On adjudication, the Original Authority held that th....
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....against this part of refund. 5. In so far as the claim of refund under Section 142(9)(b) of the Act was concerned, the Commissioner (Appeals), after going through the provisions of Section 142(9)(b), came to the conclusion that the appellants were eligible for cash refund of the entire Cenvat credit of Rs.34,73,588/- under the existing law subject to the provisions of Section 11B(2) of Central Excise Act. In his order, he examined this aspect in the light of the provisions under Section 142(9)(b) of the Act and came to the conclusion that time limit, as specified under Section 11B(1) of the Central Excise Act, cannot be applied to the refunds claimed under Section 142(3) and Section 142(9)(b) of the Act. Similarly, in respect of unjust enrichment also, relying on various judgments and statutory provisions under Section 11B(2) of Central Excise Act as made applicable to Service Tax, Commissioner (Appeals) came to the conclusion that principle of unjust enrichment was not applicable in the present case. 6. The appellants have come in Appeal against this impugned OIA rejecting the refund claim of Rs.14,40,627/-, relying mainly on the grounds that in absence of any specific provision....
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....Advocate is that since credit is a vested right and therefore, Cenvat credit earned in erstwhile regime cannot be denied by the department. 9. On the other hand, learned AR for Revenue has primarily argued that the cash refund in respect of input Cenvat credit can be only examined in terms of Section 142(3) or Section 142(9)(b) of the Act and it is not merely procedural law rather it is substantive Act, the provisions are to be construed strictly. He supports the Order of the Commissioner (Appeals) to the extent that there was no explicit provision for grant of cash refund under the existing law i.e., Central Excise Act and Rules made thereunder, for a situation as existing in the present case of refund and therefore, since it was not eligible for cash refund under the erstwhile Central Excise Act, it would not get covered within the provisions of Section 142(3) of the Act. Further, admittedly, Section 142(9)(b) is not applicable in the facts of the case. In so far as case laws cited by the appellants are concerned, learned DR has rebutted their claim by pointing out as to why such cases cannot be relied upon in support of the contentions of the appellant for grant of cash refund ....
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.... case of Gauri Plasticulture (supra), has inter alia held that the decision by the Hon'ble Supreme Court for affirming the judgment in the case of Slovak India Trading Co. Pvt Ltd (supra), cannot be held to be a declaration of law under Article 141 of the Constitution of India. He further pointed out that even if the Slovak India decision of Karnataka High Court is taken into consideration, the facts are different, in as much as Rule 5 of CCR, 2004 was omitted w.e.f. 01.04.2012, whereas, the period of refund in the present case is post 01.04.2012 and therefore, the said decision of Slovak India (supra) is also not applicable otherwise. In so far as the judgment in the case of BHEL vs CCE, Bhopal (supra) is concerned, the said judgment has been stayed by the jurisdictional High Court at Bhopal. 11. On the other hand, Learned DR relies on the following case laws in support of their contention that cash refund is not permissible in the facts of the case under Section 142(3) of the Act. (i) BHEL vs CCE, Secunderabad [Final Order No. A/31159/2019 dt.23.12.2019] (ii) Mylan Laboratories Ltd vs CCE, Secunderabad [Final Order No. A/30689/2020 dt.25.02.2020] (iii) Banswara Syntex Ltd ....
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.... submits that Tribunals in the recent cases like Granules India Ltd vs Commissioner, Hyderabad [Final Order No. A/30182/2024 dt.20.02.2024] & Flexi Caps & Polymers Pvt Ltd vs CCGST & CE, Indore [2021 (9) TMI 971 - CESTAT New Delhi], etc., have been holding that tax payer is eligible for refund of CVD & SAD paid on regularization of Advance Authorization/ EPCG Licenses. In so far as the Order of Hon'ble High Court of Jharkhand in the case of Rungta Mines Ltd (supra) relied upon by the department is concerned, learned Advocate has tried to distinguish that there the credit itself was taken illegally in the ST-3 return though they were not entitled to avail such credit, whereas, in the present case, admissibility of the credit is not under challenge and therefore, the same is not applicable in their case where they have actually sought refund under Section 142(3) of the Act. 13. Heard both the parties and perused the record. 14. The crux of the issue is whether the appellants are entitled for refund of input credit, which was neither transitioned in accordance with TRAN-1 procedure into the new regime nor got reflected in the ER-1 or revised ER-1 return post 01.07.2017. The admitted....
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....under this Act." 16. A plain reading of Section 142(3) would indicate that any claim for refund of any amount of Cenvat credit has to be disposed of in accordance with the provisions of existing law and if any amount eventually becomes due, the same is required to be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law. Therefore, what needs to be examined is whether the said refund could have been granted in accordance with the provisions of existing law or otherwise, except to the extent that the refund, if eligible, will still be admissible irrespective of any provisions contrary to this provision contained under the provisions of existing law, other than unjust enrichment. The entire Section 142 is to take care of different eventualities arising out of transition from erstwhile Central Excise Act and Finance Act to the GST regime. 17. In this case, admittedly, appellants have neither filed revised ER-1 nor carried forward this credit in TRAN-1 in accordance with the procedure prescribed under Section 140 read with the relevant Rules and Notifications made thereunder. The appellants have mainly relied on certain judgments like ....
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.... can be imposed to restrict the scope of the provisions or benefits available under existing notification/circular is also not applicable in the sense that the Act is clearly distinct from the existing laws and cannot be made subservient or contingent to the existing laws, if not otherwise clearly intended or indicated in the Act itself. The relevant provisions of the Act has to be read in the context of the Act itself, except to the extent it provides for reference to the existing laws. Thus, I find that the case laws, relied upon by the appellants, are not of much help to support their contention that Section 142(3) is an omnibus kind of provision to provide refund of all kinds of input credit, whether they are otherwise not having any explicit provisions under the Act or have failed to avail the explicit provisions under the Act for carrying forward such credit or for claiming refund of such credit in cash. 20. I have also gone through some of the judgments relied upon by the Department in support of their contention that if there is no specific provisions under the existing law then the refund cannot be granted under the GST provisions, as held by Hyderabad Bench of this Tribu....
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....e with the provisions of the existing law. Therefore, it is clearly distinguishable in so far as reliance is placed for grant of refund. 22. Further, it is to be understood that after the introduction of GST Laws with effect from 01.07.2017, certain transitional provisions were made so as to ensure that certain provisions of the existing law are further carried forward and claims, liability etc., under the existing laws were to be disposed off in terms of provisions made in the Act. In so far as it relates to refund of Cenvat credit, there are apparently three options available post introduction of GST Laws. Firstly, under Section 140, where specific and eligible Cenvat credits under existing law were entitled for being carried forward under the new regime and to be taken as credit in their electronic ledger under the Act, subject to provisions under the relevant Rules and procedures. The second provision was in terms of Section 142(3) and third under Section 142(9)(b). A plain reading of the provisions would indicate that, inter alia, refund of any amount of tax or Cenvat credit has to be disposed off in accordance with the provisions of the existing law and any amount eventually....
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....t is reproduced below for ease of reference: "45. The provision of section 142(3) does not entitle a person to seek refund who has no such right under the existing law or where the right under the existing law has extinguished or where right under the new CGST regime with respect to such claim has not been exercised in terms of the provision of CGST, Act and the rules framed and notifications issued. Meaning thereby, section 142(3) does not confer a new right which never existed under the old regime except to the manner of giving relief by refund in cash if the person is found entitled under the existing law in terms of the existing law. Section 142(3) does not create any new right on any person but it saves the existing right which existed on the appointed day and provides the modalities for refund in cash if found entitled under the existing law as the entire claim is mandated to be dealt with as per the existing law. It neither revive any right which stood extinguished in terms of the existing law nor does it create a new right by virtue of coming into force of CGST, Act. 46. Section 174 of the CGST Act read with section 6 of the General Clauses Act saves the right acquired....