The Delhi Bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has recently held that refund claim of appellant M/s Nitin Industries is allowable as credit claim on clearance of excisable goods during the excise regime does not amount to unjust enrichment. Subsequently, the adjudicating authority was directed to grant the refund.
The appellant was availing facility of cenvat credit of central excise duty on inputs and service tax on input services. The appellant migrated to GST Regime and also filed Form TRAN-I for transfer of the balance of credit. Such transfer was allowed.
The appellant decided not to re-start the production due to his old age, about 75 years. Accordingly, the appellant debited the said amount of cenvat credit of approx. Thirty Lakh Rupees (in DRC-03) in electronic ledger and applied for refund under Rule 5 of CCR read with Notification No.27/2012. Pursuant to filing of refund claim deficiency-cum-show cause notice was issued.
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 was taken as a ground for rejection and the refund claim was consequently rejected.
On behalf of the appellant, N K Sharma submitted that even under the GST Regime under Section 54 of CGST Act, the assessee is entitled to refund of the accumulated credit read with Section 49(6) of the CGST Act.
The Revenue representative Divey Sethi submitted that, Transitory Provisions Section 142(3) of CGST Act, refund is not available of the amount of credit, which has been transited to GST Regime under the provisions of the former Central Excise Act.
It was observed by the Judicial Member Anil Choudhary 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. It was also observed that, “in the facts of the present case as 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.”
Consequently, the department was directed to grant refund while the impugned order was set aside.
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