The Hyderabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Non-Utilised portion of Cenvat credit cannot be claimed as Refund in cash.
M/s Lupin Limited challenged the rejection of the refund claim of Krishi Kalyan Cess paid on services received for the manufacture of goods, namely transportation of goods, Manpower supply-recruitment, maintenance and repair service, technical testing analysis service. Further refund claimed on Service tax paid on input services received for manufacture of goods and refund on credit taken on imported goods based on bill of entry and service tax paid on reverse charge basis on input services.
The appellant challenged the impugned order inter alia urged under Rule 3(1) of CCR, 2004, assessee-a manufacturer can avail Cenvat credit and utilise the same towards payment of either Central Excise duty and/or service tax. The Cenvat Credit Rules permit availment and utilisation of Cenvat credit under a common pool and there is no restriction placed to the effect that Cenvat credit balances should be maintained separately for the manufacture of excisable goods and use in the provision of services.
The appellant urged that the incremental amount of Cenvat credit as per the ‘revised return’, can be specifically claimed as a refund under Section 142 (9) (b) of the CGST Act. The amounts claimed as refunds under dispute, have been taken credit after 30.06.2017, as reflected in the revised ST-3 return.
It was urged that rejection of Cenvat credit without invocation of Rule 14 of CCR in the SCN is bad, as no Cenvat credit can be rejected without invocation of Rule 14 of CCR, which is the enabling provision.
Further contended that Cenvat credit was required to be taken within one year from the date of invoice, as the such disallowance of Rs. 4,15,012/- concerning invoice no. 6559 dated 23/12/2015 and no. 6660 dated 31/12/2015 and bill of entry no. 3729938 dated 28/03/2015 totalling Rs. 4,15,012/- is just and proper, as the credit has been admittedly taken after one year from the date of invoice/ bill of entry.
In the case of Gauri Plastic Culture Pvt Ltd, it was held that a non-utilised portion of Cenvat credit cannot be claimed as a refund in cash, distinguishing the ruling in Union of India vs. Slovok India Trading Company, as not a declaration of law under Article 141 of the Constitution.
A Coram comprising Shri Anil Choudhary, Member (Judicial) and Shri P V Subba Rao, Member (Technical) observed that there is no bar in cross utilisation of Cenvat credit once taken, either for payment of Central Excise duty or service tax, given the provisions of Rule 3 or 4 of CCR.
The Tribunal allowed the appeal in part and directed the Adjudicating Authority to grant a refund of the balance amount of Rs. 15,37,886/- (24,99,657(-)5,46,759(-)4,15,012) within a period of 60 days from the date of service of a copy of this order.
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