TaxTMI 
TaxTMI 
2026 (3) TMI 1445
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....2.1 Appellant having Central Excise Registration No.AADCJ6035GEM001 was engaged in manufacture of Tubes, Pipes and Hollow Profiles of Iron/Stainless Steel falling under tariff heading No.73041110/73061100 of Central Excise Tariff Act, 1985. 2.2 They have obtained an Advance Authorization License No.0510401960 dated 15.03.2017 against which they had made excess import without payment of customs duty vide a Bill of Entry No.9746663 dated 19.05.2017 as pointed out by the Norms Committee. They deposited the differential customs duty along with interest as detailed in table below:- Sl. No. Challan date Differential customs duty alongwith interest 1. 09.05.2019 6,20,477/- 2. 14.01.2022 7,05,088/- 2.3 Appellant filed refund claim in respect of above amount contending that the amount paid by them towards CVD & SAD were admissible to them as Cenvat credit under the erstwhile Cenvat Credit Rules, 2004 prior to 01.07.2017. However, in the GST regime w.e.f. 01.07.2017 they could not avail the said amount as Cenvat credit and thus they are claiming refund of this amount (Rs.8,43,240/-) vide refund claim dated 03.02.2023 under the provisions of Section 142 of the....
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....ide Bill of Entry No.9746663 dated 19.05.2017 as pointed out by the Norms Committee. Accordingly, they deposited the differential Customs duty amounting to Rs.6,20,477/- along with interest vide Challan dated 09.05.2019 and the differential Customs duty of Rs.7,05,088/- along with interest vide Challan dated 14.01.2022. 5.3 Ongoing through the bifurcation details of the deposited differential Customs duty as submitted by the appellant, I find that they had deposited the differential CVD & SAD totally amounting to Rs.3,94,708/- vide Challan dated 09.05.2019 and the differential CVD & SAD totally amounting to Rs.4,48,532/- vide Challan dated 14.01.2022. It is a matter of fact that the appellant could not avail the Cenvat credit of these amounts, deposited towards CVD & SAD, in the GST regime in as much as the Cenvat Credit Rules, 2004 ceases to exist w.e.f. 01.07.2017. Accordingly, the appellant has filed the present refund claim of Rs.8,43,240/-under the provisions of Section 142 of the CGST Act, 2017. 5.4 First, I take up the issue of limitation in the present case. Section 142(3) of the CGST Act, 2017 provides that - "(3) Every claim for refund filed by ....
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.....01.2022 in the case M/s Saiher Supply Chain Consulting Pvt. Ltd. Vs The Union of India, wherein it was held that - "Para 7- The Petitioner thereafter filed third refund application on 30th September 2020. The Respondent No.2 however rejected the said third refund application by Order dated 26th November 2020 on the ground that the said application was time barred. The Petitioner filed this Writ Petition inter-alia praying for restoration of the third refund application and for various other reliefs. Para 13- The Hon'ble Supreme Court by Order dated 23rd September 2021 in Misc. Application No. 665 of 2021 issued further directions that in computing the period of limitation in any Suit, Appeal, Application and or proceedings, the period from 15th March 2020 till 2nd October 2021 shall stand excluded. Para 14- In our view, the Respondent No.2 is also bound by the said Order dated 23rd March 2020 and the Order dated 23rd September 2021 and is require to exclude the period of limitation falling during the said period. Since the period of limitation for filing the third refund application fell between the said period 15th March 2020 and 2nd October 2021, the said p....
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....ed the differential CVD & SAD totally amounting to Rs.4,48,532/- vide Challan dated 14.01.2022. There is also no doubt that the said deposited differential CVD & SAD was admissible to the appellant as Cenvat credit under the erstwhile Cenvat Credit Rules, 2004, the existing law. However, the appellant could not claim this deposited amount as Cenvat credit in the GST regime post 01.07.2017. 5.10 Section 142(3) of the CGST Act, 2017 deals with such cases, which provides for refund of any amount of Cenvat credit, admissible under the existing law. Since, the aforesaid amount deposited by the appellant towards differential CVD & SAD was admissible to them as Cenvat credit under the erstwhile Cenvat Credit Rules, 2004, the existing law, they are eligible for the refund of the said deposited amount in terms of Section 142(3) of the CGST Act, 2017. 5.11 Similar view has been taken by the Hon'ble CESTAT, Principal Bench, New Delhi vide order dated 16.03.2022 passed in the case M/s New Age Laminators Pvt. Ltd. Vs Commissioner, C.Ex & GST, Alwar, wherein it was held that - "Para 7 - Having considered the rival contentions, I find that the payment of CVD and SAD....
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.... commonly also includes transitional provisions which regulate the coming into operation of those enactments and modify their effect during the period of transition. Where an Act fails to include such provisions expressly, the court is required to draw inferences as to the intended transitional arrangements as, in the light of the interpretative criteria, it considers Parliament to have intended." (Francis Bennion : Statutory Interpretation, 2nd Edn., p. 213) The Learned Author has further pointed out : "Transitional provisions in an Act or other instrument are provisions which spell out precisely when and how the operative parts of the instrument are to take effect. It is important for the interpreter to realise, and bear constantly in mind, that what appears to be the plain meaning of a substantive enactment is often modified by transitional provisions located elsewhere in the Act." (p. 213) Similarly Thornton in his treatise on Legislative Drafting has stated : "The function of a transitional provision is to make special provision for the application of legislation to the circumstances which exist at the time when that legislation com....
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.... is required to be seen in the light of the principles as has been laid down by the Hon'ble Supreme Court in the case of Union of India v. VKC Footsteps (supra), whose relevant portions have already been quoted above. There can be no doubt that the right to refund in the matter of taxation is a statutory right which is neither a fundamental right nor a constitutional right and there is no equity in taxation. The right crystalizes only when the statute permits refund as per law and prescribed procedure. 15. It has been submitted that in the case of Gammon India Ltd. v. Chief Secretary (supra), it has been held that the rights which are saved by saving provisions continues even after repeal. Further in the judgment passed by the Hon'ble Supreme Court in the case of Baraka Overseas Trader (supra), it has been held that the accrued rights under old law is to be continued under the new law. However, the moot question in the instant case is as to whether there was any existing right of availing Cenvat credit or refund on the date of coming into force of the CGST Act in favour of the petitioner which can be said to have accrued or vested and consequently saved by the repealing pr....
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....der as to costs." 18. In the case of Eicher Motors Ltd. v. Union of India (supra), it has been held that the rights of credit facilities accrued under existing law are not to be altered. Paragraphs 5 and 6 of the aforesaid judgment are quoted as under :- "5. Rule 57F(4A) was introduced into the Rules-pursuant to the Budget for 1995-96 providing for lapsing of credit lying unutilised on 16-3-1995 with a manufacturer of tractors falling under Heading No. 87.01 or motor vehicles falling under Heading Nos. 87.02 and 87.04 or chassis of such tractors or such motor vehicles under Heading No. 87.06. However, credit taken on inputs which were lying in the factory on 16-3-1995 either as parts or contained in finished products lying in stock on 16-31995 was allowed. Prior to the 1995-96 Budget, the Central excise/additional duty of customs paid on inputs was allowed as credit for payment of excise duty on the final products, in the manufacture of which such inputs were used. The condition required for the same was that the credit of duty paid on inputs could have been used for discharge of duty/liability only in respect of those final products in the manufacture of which su....
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.... was entitled to take credit of the service tax paid to the port authorities for the "port services" by way of Cenvat credit as per the provisions of the rules. 20. However, in the instant case the petitioner has failed to follow the prescribed procedure to avail such a credit and consequently having lost such a right, he cannot claim revival of such a right and claim refund of the same by virtue of transitional provisions under Section 140(3) of the CGST Act. The facts involved in the present case would demonstrate that the petitioner had no existing right on the date of coming into force of CGST Act to avail credit of the service tax paid on "port services" as Cenvat credit and accordingly, the provision of Section 140(3) of the CGST Act cannot be construed to have conferred such a right which never existed on the date of coming into force of CGST Act. 21. So far as the judgment passed in the case of Kunal Kumar Tiwari v. State of Bihar (supra) is concerned, the same has been relied upon by the petitioner to submit that an interpretation which advances the purpose of object underlying the Act should be preferred. But the Learned Counsel for the petitioner has fa....
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.... final products. In course of the import, they received a bundle of services from M/s. Kolkata Port Trust during 26-4-2017 to 29-4-2017 in the nature of "port services" who issued Bill dated 23-5-2017 for Rs. 89,36,836/- which included service tax of Rs. 10,88,328/-. The petitioner claims to have paid the entire bill including service tax on port services in the month of April itself. The petitioner was entitled to claim the service tax paid on "port services" as Cenvat credit in their ER-1 return as per the provisions of existing law. The petitioner has submitted that the Cenvat credit was not taken as the original bill/invoice was not received though generated on 23-5-2017. Admittedly, the petitioner did not claim the service tax paid on "port services" involved in this case as Cenvat credit in their relevant ER-1 return. 27. On account of non-inclusion of the service tax paid on port services in ER-1 Return, the petitioner could not have claimed the transition of the said Cenvat credit as permissible transitional credit referrable to Section 140 of CGST Act through TRAN-1 and could not utilise the same under CGST Regime. Admittedly, the time for filing TRAN-1 was extend....
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....ion from the side of the petitioner as to under what circumstances the Bill dated 23-5-2017 was received by them as late as on 20-9-2017 (although as per the petitioner the port services were availed and the payment including service tax was made to the port authorities in the month of April, 2017), except the statement that delayed receipt of the bill was beyond their control. 32. It is the case of the petitioner that they filed a refund claim for aforesaid amount of service tax paid to the port authority as they could not carry forward the aforesaid credit to their GST TRAN-1. 33. On 28-6-2018 the petitioner filed application for refund in Form - R for refund of service tax paid on "port services" to the port authorities by referring to provisions of Section 11B of Central Excise Act read with Section 142(3) of the CGST Act, 2017. 34. Notice dated 24-7-2018 was issued to the petitioner asking them to show cause as to why the refund claim should not be rejected on following ground : (i) The petitioner had misled the Deptt. by claiming refund since they had erred by not incorporating said Cenvat credit in their ER-1 returns in time and claim the ....
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....al Excise Act which deals with refund of Cenvat credit which remained unutilized for one or another reason; (vi) Referring to the second proviso to Section 142(3) of the CGST Act, 2017 which provides that if carry forward of the transitional credit is claimed (under Section 140), then refund of such Cenvat credit would not be admissible. Therefore, from a plain reading of Section 142(3) it is crystal clear that Cenvat credit lawfully admissible/earned under the Cenvat Credit Rules, 2004 shall be allowed to be carried forward in the Electronic Credit Ledger (as per ER-1) or shall be allowed to be refunded in cash where it is not possible to carry forward in Electronic Credit Ledger. 36. The Adjudicating Authority, after considering the submissions of the petitioner observed that the petitioner is a manufacturer of dutiable goods and is registered under Service tax only as a person liable to pay service tax under Reverse Charge Mechanism. The petitioner is not an output service provider and, hence, the claim filed as refund is not maintainable. The petitioner had erroneously taken credit in ST-3 return since the impugned service is not an output se....
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.... statutory returns for the period immediately preceding the appointed day i.e. 1-7-2017. (b) The Appellant could not carry forward the credit of Rs. 10,88,328/- of service tax, paid to Kolkata Port Trust for procurement of a raw material used in manufacture of excisable goods, is not under dispute nor is the eligibility of Cenvat credit under "input service" under dispute. (c) The transitional provisions under the CGST Act, 2017 provides specifically transition of credit through TRAN-1. The appellant has failed to declare the same in time in ER-1 return and also in TRAN-1 after enactment of CGST Act. Section 140 of the CGST Act, 2017, which is a transitional provision, essentially preserves all taxes paid or suffered by a taxpayer. Credit thereof is to be given in electronic credit register under the provisions of CGST Act, 2017. (d) Further, the Board vide Circular No. 207/5/2017-S.T. clarified the issue related to payment of service tax after 30-6-2017, wherein it was clarified that the assessee can file TRAN-1 upto 30-10-2017 and same can also be revised. There could be parties who had billed on 30-6-2017 and not taken credit in electronic credit regis....
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....eme Court setting out the fundamental legal principles that in a fiscal statute, nothing can be read into its provisions and rather should not be read, which is expressly not there. In other words, an implied meaning cannot be given. Para 20 of the judgment passed by the Hon'ble Supreme Court, Union of India and Ors. v. Ind-Swift Laboratories Limited - (2011) 4 SSC 635 = 2011 (265) E.L.T. 3 (S.C.) was referred as under :- A taxing statute must be interpreted in the "20. light of what is clearly expressed. It is not permissible to import provisions in a taxing statute so as to supply any assumed deficiency. In support of the same we may refer to the decision of this Court in CST v. Modi Sugar Mills Ltd. wherein this Court at AIR para 11 has observed as follows : "11..... In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: It cannot imply anything which is not expressed; it cannot import provisions in the s....
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....d under such exemption notifications as are notified by the Government. A registered person shall be entitled to 140(5) take, in his electronic credit ledger, credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the existing law, within such time and in such manner as may be prescribed, subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day : PROVIDED that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days : PROVIDED FURTHER that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this subsection." Section 142(3) of the CGST Act reads as under :- Every claim for refund filed by any "142(3) person before, on or after the appointed day, for refund of any amount of CENVAT Credit, duty, tax, i....
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....d notification is rescinded on or after the appointed day; or (d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or (e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed; (f) affect any proceedings including that relating to an appeal, review or reference, instituted before on, or after the appointed day und....
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....(2) of Section 11B of the Central Excise Act, 1944. 42. It is not in dispute that the refunds under the existing law of Service Tax as well as Central Excise Act, 1944 are governed by Section 11B of the Central Excise Act, 1944 and sub-section (2) of Section 11B also refers to application for refund made under Section 11B(1) of Central Excise Act, 1944. Further Section 11B(3) of Central Excise Act, 1944 clearly provides that all kinds of refunds including those arising out of judgment, decree or orders of court or tribunal are to be dealt with in accordance with the provisions of Section 11B(2) of Central Excise Act, 1944. It is also important to note that Section 11B(2) of Central Excise Act, 1944 deals with the manner in which applications for refund under Section 11B(1) are to be dealt with as it uses the words "such application" which is clearly referrable to Section 11B(1) of Central Excise Act, 1944. Further, the proviso to Section 11B(2) deals with situations of rebate of duty; unspent advance deposits; principles of unjust enrichment in cases where duty of excise is paid by manufacturer or borne by buyer and who have not passed on the incidence of such duty to any ....
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....ot 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, accrued or vested under the existing law and does not create any new right which never existed on the appointed day i.e. on 1-7-2017 under the existing law. 47. The argument of the petitioner by referring to second proviso to Section 142(3) of CGST Act that it indicates that Section 142(3) would apply to the situations where the assessee has failed to take transitional credit under Section 140(1), is also devoid of any merits. The second proviso only indicates that if the assessee has taken transitional credit he will not be entitled to refund. Certainly, an assessee cannot simultaneously claim transitional credit as well as refund of the same a....
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....s in relation to certain service tax issues which were paid after 30-6-2017 under reverse charge basis to cover instances of bills raised on 30-62017 since credit is available only if the payment is made and the payment in such cases could be made only after 30-6-2017. However, in the instant case the bill was admittedly generated on 23-5-2017, services availed and bill amount including service tax was paid in April, 2017 but the original bill did not reach the petitioner for unknown/undisclosed reasons. 51. It is apparent from the impugned orders that the specific case of the respondent is that the petitioner had claimed Cenvat credit under ST-3 return thereby treating the services involved in the present case as their input services used for providing output service, whereas they are not output service provider and the same cannot be used for providing output services. Therefore, it cannot be their input services under Rule 2(l) of Cenvat Credit Rules, 2004. I am also of the considered view that the petitioner could not have claimed the impugned service tax on port services in ST-3 return as they were registered for discharging their liability under the service tax only ....
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.... (the petitioner) who have failed to comply the provision of law, both under the existing law and also under the CGST Act. The relied upon provisions of CGST Act do not cover any such situation relating to any consequences due to inter parte acts and omissions. In the instant case, as per the case of the petitioner, the entire problem has cropped up due to non-receipt of the invoice in original from the port authorities although the port services were availed and payments for the same to the port authorities were made by the petitioner in the month of April, 2017, the invoice was generated by the port authorities in the month of May, 2017 but the original invoice was received by the petitioner only on 20-9-2017 i.e. after coming into force of CGST Act. The late receipt of the invoice is essentially between the petitioner and the port authorities and the tax collecting authorities had nothing to do in the matter. Certainly, the delay in receipt of original invoice is not attributable to the respondent authorities under the existing law or under the new law. 54. The authorities have held in the impugned orders that in the instance case, the timeline for claiming Cenvat credi....
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....he case of Banswara Syntex v. CCE [2018 (91) TMI 1064] = 2019 (363) E.L.T. 773 (Raj.), the Hon'ble Division Bench of Rajastan High Court held that refund of accumulated unutilized credit on account of education cess and secondary and higher secondary education cess was not entitled for cash refund in view of their having no provision under the Act of 1944. 14. Further, I also find that the issue of the scope of Section 142(3) of the Act came up before Hon'ble Jharkhand High Court in the case of M/s Rungta Mines v. CCE, Jamshedpur [2022-TIOL-252-HC-Jharkhand-GST] = 2022 (67) G.S.T.L. 180 (Jhar.) = (2022) 1 Centax 151 (Jhar.) = (2022) 145 taxmann.com 456 (Jhar.). In this case Hon'ble High Court, interalia, held that the provision of Section 142(3) does not entitle a person to seek refund where no such rights occur under the existing law or new CGST regime in terms of provision of CGST Act and the rules framed and notification issued thereunder. Meaning thereby, Section 142(3) does not confer a new right which never existed under the old regime to the manner of giving relief if the person is not entitled under the existing law. The relevant paras of the judgment a....
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....c are recorded in the books of account of the such person within a period of 30 days from the appointed day. Section 140(5) also does not help the petitioner. Section 140 (5) has no applicability to the facts and circumstances of this case. In the instant case, admittedly the services in the nature of "port services" were received by the petitioner in the month of April 2017 and invoice was also generated in the month of May 2017. The ratio of the aforesaid judgment is squarely applicable to the facts of the case in so far as the interpretation of Section 142(3) of the Act is concerned. It must also be noted that a plain reading of provisions under the Act clearly supports this interpretation. There is no ambiguity in so far as wordings under section 142(3) are concerned." 4.5 However, I do not find revenue challenging any part of the impugned order allowing certain portions of the refund claim relying on certain decisions of this Tribunal. As this issue is not before me, I am not in position to interfere with that part of the order, even though the decision of Hon'ble High Court is contrary. 4.6 On the issue of limitation I observe that impugned order denies the ref....
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....is no merit in this plea of the appellants. The appellants also relied upon the decision of the Hon'ble Supreme Court in the case of Eicher Motors Ltd. v. Union of India, reported in 1999 (106) E.L.T. 3 (S.C.) = 1999 (30) RLT 829 (S.C.) to say that Section 37 of Central Excise Act does not empower the Revenue to make such rule, as the Clause XVI (a) of Sub-Section 2 of Section 37, only enable the Government to make rules which provides for credit of duty paid on the goods in or in relation to the Excise Rules. 12. We find that after the decision of the Hon'ble Supreme Court in the case of Eicher Motors Ltd. v. Union of India (Supra), Sub-Section XXVIII is introduced in Section 37 to provide for Rules which empower the Government to make rules for not allowing credit to be utilised for payment of duty on excisable goods, by Section 131 of Finance Act, 1999. Therefore, after this amendment reliance by the appellants on the decision in the case of Eicher Motors Ltd. v. Union of India will not help them. If a manufacturer wants to avail the benefit of Modvat credit in respect of inputs used in or in relation to the manufacture of final product on payment of duty on suc....
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....d the same also will have to be rejected on the ground that there is no challenge to the validity of the rule. 9. Without such a challenge, the appellants want us to interpret the rule to mean that the rule in question is not applicable in regard to credits acquired by a manufacturer prior to the coming into force of the rule. This we find it difficult because in our opinion the language of the proviso concerned is unambiguous. It specifically states that a manufacturer cannot take credit after six months from the date of issue of any of the documents specified in the first proviso to the said sub-rule. A plain reading of this subrule clearly shows that it applies to those cases where a manufacturer is seeking to take the credit after the introduction of the rule and to cases where the manufacturer is seeking to do so after a period of six months from the date when the manufacturer received the inputs. This sub-rule does not operate retrospectively in the sense it does not cancel the credits nor does it in any manner affect the rights of those persons who have already taken the credit before coming into force of the rule in question. It operates prospectively in regard to ....