Custom, Excise & Service Tax Tribunal
Ms Ishan Snax Private Limited vs Siliguri on 18 February, 2026
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Excise Appeal No. 76204 of 2024
(Arising out of Order-in-Appeal No. 22/SLG-CE/2024-25 dated 20.06.2024 passed by
the Commissioner of Appeals, Siliguri (Appeal) Commissionerate, G.S.T. Bhawan,
H.M. Road, Hakimpara, Siliguri - 734 001)
M/s. Ishan Snax Private Limited : Appellant
Ghoshpukur Fulbari Byepass,
Phansidewa, District: Darjeeling,
PIN - 734 434
VERSUS
Commissioner of C.G.S.T. and Central Excise : Respondent
Siliguri Commissionerate
[Pertaining to O/o. Assistant Commissioner, C.G.S.T. and
Central Excise, Siliguri Division, 35, Sarat Bose Road, Siliguri,
PIN - 734 001]
APPEARANCE:
Shri Navin Kr. Agrawal, Advocate, for the Appellant
Shri A. Mukherjee, Authorized Representative, for the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO. 75263 / 2026
DATE OF HEARING / DECISION: 18.02.2026
ORDER:[PER SHRI K. ANPAZHAKAN] M/s. Ishan Snax Private Limited (hereinafter referred to as the "appellant") is engaged in the manufacture of extruded snacks and potato chips. During the pre-GST regime, the appellant imported capital goods under the EPCG (Export Promotion Capital Goods) Scheme. Installation of such capital goods at the factory premises was duly certified by the jurisdictional Central Excise authorities.
Page 2 of 10Appeal No.: E/76204/2024-DB
2. Due to non-fulfilment of export obligation under the EPCG licence, the appellant regularised the licence by paying the entire duty foregone along with interest in March 2022, including CVD under Section 3(1) and SAD under Section 3(5) of the Customs Tariff Act, 1975. The DGFT thereafter issued a final duty-paid regularisation letter dated 18.08.2022.
3. Under the erstwhile Central Excise law, the CVD and SAD so paid were admissible as CENVAT credit under Rule 3 of the CENVAT Credit Rules, 2004. However, post implementation of GST w.e.f. 01.07.2017, there existed no mechanism to avail or transition such credit, though the duties were paid under the existing law. Accordingly, the appellant filed a refund claim of Rs. 78,09,688/- on 09.01.2023 under Section 11B of the Central Excise Act, 1944.
4. The refund claim was rejected on the grounds that CENVAT credit had not accrued prior to the appointed day. It was held that Section 11B does not permit cash refund of CVD and SAD, and accordingly the claim was rejected as time-barred.
5. The Ld. Commissioner (Appeals), vide the impugned Order-in-Appeal No. 22/SLG-CE/2024-25 dated 20.06.2024, upheld the rejection of the refund claim.
5.1. The appellant has filed this appeal against the rejection of the refund claim vide the impugned order.
6. The appellant has submitted that they are entitled to refund of CVD and SAD under Section 142(3) and 142(6) of the CGST Act, 2017, as such duties were admissible as CENVAT credit under the erstwhile Central Excise regime but became incapable Page 3 of 10 Appeal No.: E/76204/2024-DB of utilisation due to repeal of the CENVAT Credit Rules after introduction of GST.
6.1. The appellant also stated that with the introduction of GST from 01.07.2017, the erstwhile indirect tax laws were subsumed and transitional provisions under Sections 140 to 142 of the CGST Act, 2017 were enacted to safeguard accrued rights, including refunds of CENVAT credit. Sections 142(3) and 142(6) specifically provide that refund claims relating to CENVAT Credit, duty or tax paid under the existing law, filed before, on or after the appointed day, shall be processed under the provisions of the existing law and any admissible amount shall be refunded in cash, provided such credit was not carried forward under GST. It is submitted that in the present case, the appellant filed the refund claim on 09.01.2023, well after the appointed day, for CVD and SAD paid under the earlier regime, which it was otherwise entitled to avail as CENVAT credit under the Central Excise Act, 1944; since the excise law had been repealed, availing such credit through returns or carrying it forward through TRAN-1 was impossible, attracting the principle of lex non cogit ad impossibilia; that the refund claim was therefore rightly filed under Section 11B of the Central Excise Act read with Section 142 of the CGST Act. The appellant also pointed out that it is undisputed that the incidence of tax has not been passed on; the authorities erred in restricting eligibility only to the conditions under Section 11B(2), ignoring that the substantive right to refund flows from the transitional provisions. On the basis of the submission that the appellant was always eligible to avail CENVAT credit of CVD and SAD under the erstwhile regime, possesses valid documents under Rule 9 of the Page 4 of 10 Appeal No.: E/76204/2024-DB CENVAT Credit Rules, and has fulfilled all conditions under Sections 142(3) and 142(6) of the CGST Act, it is their contention that there was no justification for rejection of the refund claim.
6.2. The appellant has relied on the following decisions in support of their contention that cash refund is allowed under section 142(6) of the CGST Act:
• M/s. ITCO Industries Limited vs Commissioner of GST and Central Excise, Salem [2022(6) TMI 1040
- CESTAT Chennai] • M/s. New Age Laminators Pvt Ltd vs Commissioner of Central Excise, Goods and Services Tax, Alwar, Rajasthan [2022(3) TMI 748] • M/s. Mithila Drugs Pvt Ltd vs Commissioner of Central Goods and Services Tax, Udaipur (Rajasthan) [2022 (3) TMI 58 - CESTAT New Delhi] • M/s. Flexi Caps and Polymers Pvt Ltd vs Commissioner, CGST and Central Excise Indore [2021(9) TMI 917 - CESTAT New Delhi] • M/s. Thermax Limited vs Union Of India [2019 (2) TMI 1744 Gujarat High Court] • M/s. Krah Woory India Pvt. Ltd. vs Commissioner of GST & Central Excise, Chennai [2024 (2) TMI 368 - CESTAT CHENNAI] • M/s. Brose India Automotive Systems Pvt Ltd vs Commissioner of CGST & Central Excise, Pune -1 [2022(5)TMI 480] • M/s. Aurobindopharma Ltd. vs Commissioner of Central Tax Hyderabad - Customs and Commissioner of Central Tax, Medchal - GST [2024 (2) TMI 367 - CESTAT HYDERABAD] • M/s. Hindustan Equipments Pvt. Ltd. Vs Commissioner of CGST & central Excise, Indore (2024) 24 Centax 69 (Tri.-Delhi) 6.3. In view of these submissions, the appellant prayed for allowing their appeal and ordering for sanction of the refund claimed by them.Page 5 of 10
Appeal No.: E/76204/2024-DB
7. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order.
8. Heard both sides and perused the appeal records.
9. It is a fact that in the present case, the appellant have imported capital goods under the EPCG (Export Promotion Capital Goods) Scheme. Due to non- fulfilment of export obligation under the EPCG licence, the appellant regularised the licence by paying the entire duty foregone along with interest in March 2022, including CVD under Section 3(1) and SAD under Section 3(5) of the Customs Tariff Act, 1975.Under the erstwhile Central Excise law, the CVD and SAD so paid were admissible as CENVAT credit under Rule 3 of the CENVAT Credit Rules, 2004. However, post implementation of GST w.e.f. 01.07.2017, there existed no mechanism to avail or transition such credit, though the duties were paid under the existing law. Accordingly, the appellant filed a refund claim of Rs. 78,09,688/- on 09.01.2023 under Section 11B of the Central Excise Act, 1944. The refund claim was rejected on the grounds that CENVAT credit had not accrued prior to the appointed day. It was held that Section 11B does not permit cash refund of CVD and SAD, and accordingly the claim was rejected as time-barred.
9.1. In this regard, we note that CENVAT Credit is a vested right and cannot be extinguished merely due to absence of a procedural mechanism under GST. Denial of refund defeats the doctrine of legitimate expectation and violates Articles 14 and 265 of the Constitution. The refund claim arises from the transitional provisions of the CGST Act and not Page 6 of 10 Appeal No.: E/76204/2024-DB independently from Section 11B of the Central Excise Act. Consequently, conditions under Section 11B(2) cannot be used to deny a refund specifically permitted under Section 142 of the CGST Act.
9.2. The appellant could not transition or avail the credit through TRAN-1 as the duties were paid after 01.07.2017. Law does not compel performance of an impossibility. We observe that, under similar circumstances, Refund of CVD and SAD paid post-GST has been uniformly allowed in multiple decisions.
9.3. We find that the issue is no longer res integra as the same issue has been decided by CESTAT, New Delhi, in the case of M/s. New Age Laminators Pvt. Ltd. vs Commissioner of Central Excise, Goods and Services Tax, Alwar, Rajasthan [2022(3) TMI 748], wherein it has been categorically held that - as credit of CVD and SAD was no longer available under GST regime, which was however available under erstwhile regime of Central Excise prior to 30-6-2017, an appellant is entitled to refund under the provisions of Section 142(3) and (6) of Central Goods and Services Tax Act, 2017 . The relevant paragraphs of the said decision are reproduced below for ready reference:
"7. Having considered the rival contentions, I find that the payment of CVD and SAD subsequently during GST regime, for the imports made prior to 30-6-2017 is not disputed under the advance authorisation scheme. It is also not disputed that the appellant have paid the CVD and SAD in May, 2018 & May, 2019, by way of regularisation on being so pointed out by the Revenue Authority. Further, I find that the Court below have erred in observing in the impugned order, that without producing proper records of duty paid invoices etc. in manufacture of dutiable final product, refund cannot be given. I further find that refund of CVD and SAD in question is allowable, as credit is no longer available under the GST regime, which was however available under Page 7 of 10 Appeal No.: E/76204/2024-DB the erstwhile regime of Central Excise prior to 30-6- 2017. Accordingly, I hold that the appellant is entitled to refund under the provisions of Section 142(3) and (6) of the CGST Act.
8. Accordingly, I direct the jurisdictional Assistant Commissioner to grant refunds to the appellants of the amount of SAD & CVD as reflected in the show causes notices and also in the orders-in-appeal. Such refund shall be granted within a period of 45 days from the date of receipt of this order along with interest under Section 11BB of the Central Excise Act. The impugned orders are set aside."
9.4. The same view has also been taken by CESTAT, New Delhi, in the case of M/s. Flexi Caps and Polymers Pvt. Ltd. vs Commissioner, CGST and Central Excise Indore [2021(9) TMI 917 - CESTAT New Delhi], wherein refund has been allowed in a similar situation. The relevant part of the said decision is reproduced below:
"6. After hearing the rival contentions perusing the entire record I observe and hold as follows :-
The apparent fact on record is that the appellant has paid the entire CVD/SAD upon the goods imported by the appellant, as inputs, for manufacturing its final product. No doubt, initially the import was made duty free but for the reason that the appellant was granted an advance license No. 5610005102, dated 21-3-2017 as is apparent from the Show Cause Notice itself. It is also nowhere been denied that the appellant could not fulfill the export obligation arising out of the said license. The only course of action with the appellant in the given circumstances was to seek the redemption which has also not been denied. The letter of DGFT dated 17-1-2018 is apparently and admittedly pursuant to the appellant's own request of seeking redemption. The apparent and admitted fact remains on record is that the entire customs duty with respect to the inputs imported by the appellant stands fully deposited by the appellant not only alongwith interest but also with the penalty as was directed to be paid while seeking said redemption. These Page 8 of 10 Appeal No.: E/76204/2024-DB admitted facts are sufficient to hold that the appellant became entitled to avail Cenvat credit of the CVD/SAD paid by him on the imported inputs in terms of Rule 3 of Cenvat Credit Rules, 2004 (CCR).
7. Apparently, the said Cenvat credit could not be availed any more due to the erstwhile law i.e. Central Excise Act, 1944 being taken over by New GST Act, 2017. Perusal thereof shows that the Act contains a provision to take care of such unutilized credits of the assessee to be refunded to them in cash. The relevant provision is Section 142 of GST Act, with sub-section (3) thereof reads as follows :-
"(3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 :"
and sub-section (8)(a) and (b) reads as follows :-
"(8)(a) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so covered shall not be admissible as input tax credit under this Act;
(b) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount Page 9 of 10 Appeal No.: E/76204/2024-DB rejected, if any, shall not be admissible as input tax credit under this Act."
In view of these provisions, denying the said entitlement, that too, on the ground that the letter of DGFT cannot be considered as the assessment order is not appropriate to my opinion because the fact still remains is that the requisite duty stands paid in full by the appellant which entitles the appellant to have credit thereof though in the form of cash in terms of the provisions of the new Act. Hence, I hold that the view formed by Commissioner (Appeals) while rejecting the refund is not appropriate. Rather it is beyond the intention of the Legislature."
10. In the present case, we find that the appellant is eligible for availing the CENVAT Credit of CVD and SAD paid by them under Rule 3 of the CENVAT Credit Rules, 2004 and there is no dispute on the eligibility of availment of the credit. However, post implementation of GST w.e.f. 01.07.2017, there existed no mechanism to avail or transition such credit, though the duties were paid under the existing law. We observe that Sections 140 to 142 of the CGST Act, 2017 were enacted to safeguard accrued rights, including refunds of CENVAT credit. Sections 142(3) and 142(6) specifically provide that refund claims relating to CENVAT credit, duty or tax paid under the existing law, filed before, on or after the appointed day, shall be processed under the provisions of the existing law and any admissible amount shall be refunded in cash, provided such credit was not carried forward under GST.
10.1. It is a fact on record that the appellant filed the refund claim on 09.01.2023, well after the appointed day, for CVD and SAD paid under the earlier regime, which it was otherwise entitled to avail as CENVAT credit under the Central Excise Act, 1944. Considering Page 10 of 10 Appeal No.: E/76204/2024-DB the fact that the excise law had been repealed, and availing such credit through returns or carrying it forward through TRAN-1 was impossible, by relying on the decisions cited supra, we hold that the appellant is eligible for the cash refund of the CVD and SAD paid by them as per section 142(6) of the CGST Act.
11. Accordingly, the jurisdictional Assistant Commissioner is to grant refunds of the amount of SAD & CVD paid by the appellant, as reflected in the Show Cause Notice and also in the impugned Order- in-Appeal. Such refunds shall be granted along with interest as provided under section 11BB of the Central Excise Act, 1944, within a period of three months from the date of receipt of this order.
12. In view of the above findings, we set aside the impugned order and allow the appeal filed by the appellant, with consequential relief, if any, as per law.
(Operative part of the order was pronounced in open court) Sd/-
(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd