A Single Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that No bar of unjust enrichment on accumulation of credit on clearance of excisable goods during Excise Law Regime.
The issue in this appeal is whether the refund claim of the appellant, M/s Nitin Industries (Trade Name) of the amount of cenvat credit balance has been rightly rejected by the lower authorities.The appellant was a manufacturer of Sheet Metal Components (Drum) and was registered with the Central Excise Department. The appellant was availing facility of cenvat credit of central excise duty on inputs and service tax on input services.
As the appellant was mostly clearing their goods for export under bond (Form ARE-3), cenvat credit was accumulated. Such input credit had been declared in the Return(s) filed before the Department, which is not disputed. The appellant had cenvat credit balance of Rupees thirty lakhs(including cess).
The appellant migrated to GST Regime and also filed Form TRAN-I for transfer of the balance of credit. Such transfer was allowed. The production in the factory of the appellant was lying closed since financial year 2014-2015.
The appellant decided not to re-start the production hence the appellant debited the said amount of cenvat credit in electronic ledger and applied for refund on under Rule 5 of Cenvat Credit Rules (CCR), 2004 read with Notification No.27/2012. Pursuant to filing of refund claim deficiency-cum-show cause notice was issued.
All the refund claims were rejected, on the ground that in terms of Rule 5 read with Notification 27/2012 read with Section 11 B of the Central Excise Act, as made applicable in Service Tax matters vide Section 83 of the Finance Act,1944. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals), who was pleased to uphold the rejection of the refund claim. Hence the present appeal.
The Counsel for the appellant stated that even under the GST Regime under Section 54 of the Central Goods and Service Tax (CGST) Act, the assessee is entitled to refund of the accumulated credit read with Section 49(6) of the CGST Act. The appellant has admittedly debited the said amount of refund claim in the Electronic Credit Register (DRC-03). Thus, the appellant is entitled to refund in terms of Section 54 read with Section 49 read with Section 142(3) of CGST Act.
A Coram consisting of Anil Choudhary, Judicial Member observed that “The appellant is entitled to refund in terms of Section 142(3) read with Section 54 read with Section 49(6) of the CGST Act. the credit has been accumulated due to clearance of excisable goods, during the Excise Law Regime for export, the bar of unjust enrichment is not attracted.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
