TaxTMI 
TaxTMI 
2024 (9) TMI 919
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....ling periodical Central Excise returns as a manufacturer of excisable goods. The appellants also availed CENVAT credit of the duty paid on the inputs, capital goods and the tax paid on input services under the provisions of CENVAT Credit Rules, 2004 (CCR). Upon introduction of GST regime w.e.f. 01.07.2017, the appellants have duly taken the registration with jurisdictional GST authorities vide GSTIN 27AAACL1069K1ZF. 2.3 The appellants had filed original ER-1, a monthly return for production and removal of goods and other relevant particulars including CENVAT credit, for the month of June 2017 on 10.07.2017, indicating admissible CENVAT credit of Central Excise duty and Service Tax. Subsequently, the appellants had filed revised ER-1 for the month of June 2017 on 31.07.2017, indicating admissible CENVAT credit of Central Excise duty and Service Tax for an additional amount of Rs.30,52,536/- on input, capital goods and input services, which were not claimed in earlier prerevised return filed by them. Further, the closing balance of CENVAT Credit in the ER-1 return for June-2017 has been transitioned as CGST credit in terms of Section 140(1) of the CGST Act, 2017 in the month of Dece....
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....(1A) of CGST Rules, 2017; (ii) There is no provision to refund CENVAT credit claimed in the Revised return in the existing i.e. law under Section 11B of the Central Excise Act 1944; (iii) The Refund Claim is time-barred in terms of section 11B of Central Excise Act, 1944: 2.5 In the appeal preferred by the appellants against the above Order-inOriginal dated 15.10.2019, the learned Commissioner (Appeals) vide impugned order dated 13.01.2020, had rejected such appeal by upholding the order of the original authority as follows: (i) Refund Claim should have been filed in accordance with Section 142(3) of CGST Act and not under 142(9)(b) of the CGST Act; and (ii) Revised FORM GST TRAN-1 was allowed to be filed up to 31 March 2019 as per Rule 120A of Rules, 2017 and the same should have been filed for transition of the CENVAT credit instead of seeking refund of the CENVAT credit under Section 142(9)(b) of the CGST Act. 2.6 Being aggrieved with the above Order-in-Appeal dated 13.01.2020, the appellants have filed this appeal before the Tribunal. 3.1 Learned Advocate appearing for the appellants at the outset, had submitted that the issue of whether this Tribunal has juris....
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....ncluding the Central Excise Act, 1944) after the appointed date (i.e., 1 July 2017, being the date when the CGST law became operational).The afore-mentioned provision provides for refund of CENVAT Credit in cash in case it is found to be admissible on account of filing of a revised return under the erstwhile law. In the present case, the CENVAT Credit of Rs. 30,52,536/- became admissible pursuant to the filing of a revised Central Excise return within time limit. Thus, the appellants should be entitled to claim refund of the CENVAT Credit on the basis of the afore-mentioned provision. Learned Advocate also submits that in the case of additional CENVAT credit found admissible on the basis of revised returns, the law does not envisage transition of such additional credit to the GST regime and provides for cash refund of such credit. 3.5 In this regard, the appellants placed reliance on the following judgments: (i) Punjab National Bank v. Commissioner of Central-Tax, Bangalore North - 2021 (52) G.S.T.L. 421 (Tri.-Bang.) (ii) Commissioner, Central Tax, Goods & Services Tax, Delhi East vs. CH2M Hill (India) Pvt. Limited, Service Tax Appeal No. 51068 of 202....
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....a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer: Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply. (2) (a) Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act; (b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containin....
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.... not be admissible as input tax credit under this Act. Repeal and saving. Section 174. (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (1 of 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955), the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), and the Central Excise Tariff Act, 1985 (5 of 1986) (hereafter referred to as the repealed Acts) are hereby repealed....." Central Excise Act, 1944 "Claim for refund of duty and interest, if any, paid on such duty. Section 11B. (1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed an....
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....aid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty] borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify:....." 7.2 Before I proceed with the present case in hand, the competency of the Tribunal in handling the orders passed under Section 142(2) of the CGST Act, 2017 in appeal before them, has been dealt by the Larger Bench of the Tribunal, and the reference made therein have been clarified in the Interim Order No. 40021/2023 dated 21.12.2023 in the case of Bosch Electrical Drive India Private Limited Vs. Commissioner of Central Tax, Chennai. The relevant paragraphs of the said order is extracted and given below: "48. The Division Bench of the Tribunal, while referring the matter to the Larger Bench had observed in paragraph 14.1 that an appeal would lie under section 112 of the CGST Act to the Appellate Tribunal constituted under the provisions of t....
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....ch provisions apply as a non-obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub-section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142(9)(b) of the CGST Act, 2017, in dealing with refund of 'CENVAT credit'. It is also on record, that there is no dispute with respect to fulfilment of unjust enrichment angle in the case of the present refund, as nothing contrary has been expressed by the authorities below with respect to eligibility of refund while examining the same. 8.3 Further, upon introduction of GST regime, the transitional arrangements have been provided under Section 142 of CGST Act, to enable the CENVAT credit, if refundable, to be paid in cash to the eligible persons, as there was no way that such excess CENVAT credit could be used by the assessee in payment of t....
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....itially MODVAT was in operation. The Modified Value Added Tax (MODVAT) is the predecessor to Central Value Added Tax (CENVAT). The CENVAT credit scheme has its origin in India owing to the Indirect Taxation Enquiry Committee formed in 1976, popularly known as Jha Committee. The committee took serious note of the limitations and drawbacks of VAT system and suggested that under our administrative and other circumstances, we should be very cautious in adopting VAT system. The Jha committee recommended, experimental basis, in a phased manner extension of VAT system to a limited number of commodities. Though the name suggested by the Jha committee was manufacturing VAT 'Manvat', the government had adopted it is as 'MODVAT'. The Finance Minister in the Budget Speech on the Floor of the Parliament stated as detailed below, thus giving the background material which led to the development of MODVAT scheme. It also explains the intent and purpose of the credit scheme. This it would be gainful to look into some of the paragraphs of such budget speech enunciating the policy of the government on the said the scheme of credit. The extract of the same is given below: SPEECH OF SHRI ....
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....duty on the inputs covered by these chapters will be available. 117. The proforma credit given will cover both excise duty and additional duty of customs also known as countervailing duty. Set off will also be available for packaging materials, consumables, paints though these are not strictly raw materials. Items outside these chapters availing proforma credit and benefits of set off under any erstwhile schemes would be allowed to continue to get the relief to the extent the revised tariff headings permit. However, the MODVAT scheme and the erstwhile schemes to the extent they are continued, will be mutually exclusive. 118. The MODVAT scheme will be in force from 1st March, 1986. Manufacturers who fulfil the requirement will be able to avail of proforma credit in respect of the permissible goods which have suffered duty of excise from 1st February, 1986 and are either in the stocks or are received by the manufacturer on or after 1st March, 1986. 119. As stated earlier, the introduction of MODVAT scheme will result in considerable reduction in the cost of final product and, therefore, to retain the collection of excise duties at the earlier level, the rat....
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....ime, which should cheer the industry. However, the good news for the cigarette manufacturers ends here. I propose to enhance the rates of excise duty on all categories of cigarettes by 5 %. 91. At present, MODVAT credit of CVD paid on project imports is restricted to the extent of 75%. This has been an irritant. This credit shall now be available for 100% of the CVD. I have also decided to do away with the condition of installation as a pre-requisite for taking credit on capital goods." 9.4 The Kelkar Task Force on Fiscal Responsibility and Budget Management (FRBM) in 2005 had recommended for introduction of a comprehensive tax on all goods and service replacing Central level VAT and State level VATs. It had recommended replacing all indirect taxes except the customs duty with value added tax on all goods and services with complete set off in all stages of making of a product. Accordingly, in the Union budget 2006-2007, an announcement was also made of the intention of the government to move in such direction, as follows: Budget 2006-2007 Speech of P. Chidambaram Minister of Finance February 28, 2006 "155. It is my sense that there is a large consensus that the country....
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....of goods and services in India has, hitherto, been characterised as a cascading and distortionary tax on production resulting in mis-allocation of resources and lower productivity and economic growth. It had also inhibited voluntary compliance. Therefore, it was necessary to replace the existing indirect tax system by a new regime which would foster the achievement of the following objectives viz., (a) The incidence of tax falls only on domestic consumption; (b) The efficiency and equity of the system is optimized; (c) There should be no export of taxes across taxing jurisdictions; (d) The Indian market should be integrated into a single common market; (e) It enhances the cause of cooperative federalism. Accordingly a well-designed 'value added tax' on all Goods and Services (GST) has been introduced as the most elegant method of eliminating distortions and taxing consumption. Under this GST structure, all different stages of production and distribution can be interpreted as a mere tax pass through, and the tax essentially 'sticks' on final consumption within the taxing jurisdiction. It is also of common knowledge that GST subsumes a number of existing indirect taxes which were ear....
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....n the backdrop of above discussions on migration from earlier taxation regime to new GST regime, and the same is not proper and therefore denial of cash refund solely on the basis that there exists no provision under CENVAT statue for cash refund, is not legally sustainable. 9.9 I further find support for my above observations about the basis of CENVAT as input tax neutralisation scheme from the following judgements of the Hon'ble Supreme Court. The object of the input credit scheme had been explained by the Hon'ble Supreme Court in the case of CCE Vs. Dai Ichi Karkaria Ltd. 1999 (112) E.L.T. 353 (S.C.) as follows: "17. It is clear from these Rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which....
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.... duty paid on the inputs. 9.11 From the detailed discussions as above, it is reasonable to conclude that when the Central Excise Act, 1944 amongst other laws relating to old tax regime was repealed by Section 174 of the CGST Act, 2017 and that the CCR is also being superseded vide Notification No.20/2017-C.E. (N.T.) dated 30.06.2017, by the Central Government for smooth implementation of transfer to GST regime in indirect taxation, I find that the provisions of Section 142 of the CGST Act, 2017 are sufficient to provide for the tax administration for sanction of cash refund in circumstances stated therein, and I find that there is no need and it is not legally feasible to make any specific provision in CENVAT statute itself, for enabling cash refund of excess CENVAT credit relating to earlier regime while moving to the new GST regime. 10.1 I further find that the issue of reversal of excess CENVAT credit under the transitional arrangement as provided under Section 142 of CGST Act, 2017 has already been addressed by the Co-ordinate Bench of the Tribunal in the following cases, and it was held that cash refund of such excess CENVAT credit is permissible. The relevant paragra....
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....hat such CENVAT Credit amount shall be paid to the Appellant in cash, it can't avail dual benefits once order of this Tribunal is duly complied by the Respondent Department by the closing date of the window. THE ORDER 10. The appeal is allowed and the order passed by the Commissioner of Central Tax, Central Excise & Service Tax (Appeals), Raigarh vide Orderin-Appeal No. MKK/466/RGD APP/2018-19 dated 07.02.2019 is hereby set aside and the Appellant is eligible to get refund of Rs.11,04,057/- paid against CVD and SAD which applicable interest, if any, within a period of two months of communication of this order." 10.2 The relevant paragraphs in the Final Order No. 42467/2021 dated 16.12.2021 in the case of M/s Circular Flow Technologies India Pvt. Limited Vs. Principal Commissioner of GST & Central Excise, Coimbatore are extracted and given below: "11. Section 142 (3) of GST Act provides how to deal with claims of refund of service tax of tax and duty / credit under the erstwhile law. It is stated that therein that such claims have to be disposed in accordance with the provisions of existing law and any amount eventually accruing has to be paid in cash. 1....
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....iew 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. Further I find that the appellant had already debited the entire amount in their Cenvat account and the said amount was debited under a bona fide belief that the cash refund would be sanctioned to them and the very fact that Cenvat credit was never disallowed, hence the Cenvat credit lying in the balance of Cenvat account are liable to be refunded in cash to the appellant as per the provisions of sub-section (3) or sub-section (6)(a) of Section 142 of CGST Act. This issue is no more res integra and has been held in favour of the appellant by various decisions cited supra. Hence, by following the ratio of the said decisions, I am of the considered view that the impugned order denying the cash refund is not ....
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....following reasons. Firstly, it is not the case of refund arising on account of denial of any exemption or setting aside of any demand in the SCN, but refund arising on account of the excess CENVAT credit paid by the appellants, which is in excess of the CENVAT credit that is required to be paid in terms of the Rule 6(3A) of the CCR and specifically allowed to be adjusted in terms of clause (f) of Rule 6(3A) of the CCR. Secondly, the transition provisions referred to therein are regarding credit earned by a manufacturer under the CENVAT Credit Rules, 2002 and how they will be allowed to be utilised in accordance with CENVAT Credit Rules, 2004. In the present case, the existing indirect tax law relating to levy of Central Excise duty i.e., Central Excise Act, 1944 has been repealed and law relating Service Tax in Chapter V of the Finance Act, 1994 have been suitably amended to pave way for implementation of new GST regime. Hence, I find that the judgement in the case of Gauri Plasticulture P. Ltd. (supra) is not applicable to the present factual matrix of the case. 10.5 Further, I have also gone through the various case laws cited by both sides to support their respective stand. How....
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....on (2) of section 11B of the Central Excise Act, 1944 (1 of 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. ********************************" 11 In our view, Section 142(3) of the Act is very clear in as much as, it says " every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law .............. and any amount eventually accruing ........ shall be paid in cash ......". It is very widely worded in as much as it uses the expression "CENVAT credit" and also "any other amount paid". Even if, we take it that petitioner has made voluntary deposit, that amount has to be shown as CENVAT credit in the account of petitioner. In the alternative, it would certainly come under the category "or any other amount paid". Therefore, either way the amount paid by petitioner, admittedly, has to be refunde....