Refund Of CVD & SAD Paid After GST Introduction Maintainable U/S 142(3) Of CGST Act: CESTAT
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that refund of CVD (Countervailing Duty) & SAD (Special Additional Duty) paid after GST introduction maintainable U/S 142(3) CGST Act. Dr. Ajaya Krishna Vishvesha (Judicial Member) was addressing the issue of whether refund claim is admissible under Section 142 (3) of CGST Act, 2017 in...
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that refund of CVD (Countervailing Duty) & SAD (Special Additional Duty) paid after GST introduction maintainable U/S 142(3) CGST Act.
Dr. Ajaya Krishna Vishvesha (Judicial Member) was addressing the issue of whether refund claim is admissible under Section 142 (3) of CGST Act, 2017 in lieu of CENVAT credit of CVD & SAD, where such CVD & SAD are paid after introduction of GST due to non-fulfilment of export obligations against the goods imported duty free, prior to introduction of GST.
In this case, the assessee/appellant is a manufacturer of taxable goods, viz., Brass Strips, P.B. Strips & Brass Caps falling under Chapter Sub-Heading Nos. 74092100, 74093100 & 74199930 respectively of Central Excise Tariff Act, 1985.
The assessee imported the said inputs under Advance Authorization scheme without payment of Customs duties against export obligation of final products. The assessee imported such goods during the period 12.01.2012 to 31.01.2014, i.e. prior to the introduction of GST regime.
However, since the amount was paid pursuant to introduction of GST and there being no specific provision or mechanism to avail Cenvat credit of CVD and SAD, the assessee could not avail the credit under GST regime.
The assessee filed a refund claim in terms of Section 142(3) of the CGST Act, 2017 pertaining to CVD and SAD paid due to non-fulfilment of export obligations in respect of goods imported before 01.07.2017 under Advance Authorisation scheme.
The Assistant Commissioner vide Order rejected the refund claim. Aggrieved by the Order, the assessee preferred appeal before the Commissioner (Appeals).
The Commissioner (Appeals), upheld the Order rejecting the refund claim of the assessee and dismissed the appeal filed by the assessee.
The Tribunal agreed with the assessee that issuance of deficiency letter asking for making payment of additional duties of excise on account of import of excess of eligible quantities against advance authorization, is nothing but mere an opportunity provided to regularize the bona fide default made by authorization holder.
The issuance of deficiency letter does not tantamount to initiation of assessment or adjudication proceedings unless an action is taken against authorization holder under the FTDR Act for any misrepresentation or misdeclaration, added the bench.
In view of the above, the Tribunal allowed the appeal.
Case Title: Rashtriya Metal Industries Limited v. Commissioner of CGST & Central Excise, Surat
Case Number: EXCISE APPEAL NO. 10388 OF 2020-SM
Counsel for Appellant/ Assessee: Vineet Nagla
Counsel for Respondent/ Department: Anand Kumar