TaxTMI 
TaxTMI 
2024 (9) TMI 919
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....ies holding Registration Certificate No. AAACL1069KXM007. They have been filing 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....
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....in accordance with provisions of Section 140 of CGST Act read with Rule 117, 120A, 120(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 Lear....
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....that provides for transition of CENVAT credit in the case of revision of any returns furnished under the existing law (i.e., including 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.) ....
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.... on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than 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 servic....
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....cash under the existing 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 (1 of 1944) and the amount rejected, if any, shall 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 ma....
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.... (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid 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 C....
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....ists no provision under Rule 5 of the CCR, for cash refund of excess CENVAT credit and therefore the refund in terms of proviso (c) to Section 11B(2) ibid, is not permissible in the case of the appellants. In this regard, I find that the provisions of Section 142(9)(b) of the CGST Act, is a transitional arrangement wherein it has been specifically provided that such 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....
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....ution of India, enabling legislation being different, it is also worthwhile to see the background of the CENVAT scheme and the see whether such cash refund during its migration to GST regime as provided under Section 142 of the CGST Act, 2017 is proper and legally sustainable. 9.2 If we turn the history of CENVAT scheme right from its beginning, it can be seen initially 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 de....
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.... and packaging materials, plastics, glass and glassware, rubber products, base metals and articles of base metals, machinery and mechanical appliances including electrical equipments, motor vehicles and certain miscellaneous manufactured products. This would imply that as long as the input and the final product are covered by the specified 37 chapters and the final product bears some duty of excise, credit of 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 p....
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..... 89. I also propose to expand and rationalize the scope of the MODVAT scheme. All inputs and all capital goods are now included in the eligible list of MODVAT scheme. The only exception will be High Speed Diesel Oil and Petrol. However, I propose that the availability of MODVAT credit on capital goods will be spread over a period of two years, with effect from 1st April 2000. 90. My proposals include full extension of MODVAT scheme to cigarettes for the first time, 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....
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.... Speech for the financial year 2006-07. GST is a destination based consumption tax. It has been designed in a manner so that tax is collected at every stage and the credit of tax paid at the previous stage is available to set off the tax to be paid at the next stage of transaction thereby eliminating cascading of taxes. This eradicates "tax on tax" and allows cross utilization of input tax credits which benefit the industry by making the entire supply chain tax neutral. 9.6 It is known very well that the taxation 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 t....
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....4 to a new GST Act, 2017, providing refund of CENVAT credit in accordance with the provisions of existing law, cannot be interpreted to mean that the existing CENVAT Credit Rules, 2004 provided only for refund in specified situations as stated in Rule 5 ibid, and hence cash refund of CENVAT credit is not permissible, as it has been specifically enabled under Section 142 of the CGST Act. Such a narrow interpretation of transitional provision, in my view, is not correct interpretation of legal provisions of the law in 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....
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....he jurisdictional Assistant Collector, declaring his intention to take Modvat credit after paying duty on the inputs. The object behind rule 57A read with rule 57G and rule 57-I was utilization of credit allowed towards payment of duty on any of the final products in relation to manufacture of which such inputs were intended to be used in accordance with the declaration under rule 57G. Rule 57-I referred to consequences of taking credit wrongly. 10. The object of the Modvat scheme was to reduce cost of final product by taking credit for the 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 ....
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.... not due on the said day also. Therefore, in view of clear provision contain under Section 142(6)(a) of the CGST Act, Claimant/Appellant is eligible to get the refund of credit by E/87606/2019 cash except where unjust enrichment is alleged or established against the Appellant. The Appellant is also otherwise eligible to go for availment of transitional credit through filing required forms in Tran-I as per the order passed by the Hon'ble Supreme Court on 22nd July, 2022 but in view of the observation of this Tribunal read with Section 142(6)(a) of the CGST Act that 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 ....
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....laim 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, 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 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 it is very clear that as per sub-section (6)(a) of Section 142, 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. Further I find that the appellant had already debited the entire amount in their Cenvat account and the said....
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....ility of small scale industries exemption under Notification dated 28.02.1993, which was denied by issue of Show Cause Notice; the demand was confirmed by the Order-in-Original by denying exemption on the ground that the assessee was manufacturing pipes bearing a mark 'Jain pipe', and in an appeal by the assessee, the learned Commissioner (Appeals) had held that this cannot be considered as a brand name. Consequent to this, the assessee had filed a refund claim. On careful perusal of the judgement dated 14.06.2019, I find that the facts of the present case before me are entirely different on account of the 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 allo....
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....ction 142(3) of the Act reads as under: "142:- Miscellaneous transitional provisions :- (1) ******************* (2)******************* (3) 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, 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 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): 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 bef....