Custom, Excise & Service Tax Tribunal
Bilcare Ltd vs Commisioner Central Excise And Service ... on 25 August, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO. I
EXCISE APPEAL No. 85979 of 2022
[Arising out of Order-in-Appeal No. PUN-EXCUS-001-APP-112/2021-22 dated
31.12.2021 passed by the Commissioner of Central Tax (Appeals-I), Pune]
Bilcare Limited .... Appellants
1028, Shiroli, Rajguru Nagar
Pune - 410 505.
VERSUS
Commissioner of Central Excise & Services Tax .... Respondent
Pune-I CGST Commissionerate GST Bhavan, 41A, Sasson Road Pune - 411 001.
APPEARANCE:
Shri Mehul Jivani, Chartered Accountant for the Appellants Shri Dinesh Nanal, Authorized Representative for the Respondent CORAM: HON'BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL) FINAL ORDER NO. A/86298/2025 Date of Hearing: 14.05.2025 Date of Decision: 25.08.2025 PER: M.M. PARTHIBAN This appeal has been filed by M/s Bilcare Limited, Pune (herein after, for short, referred to as 'the appellants') against the Order-in- Appeal No. PUN-EXCUS-001-APP-112/2021-22 dated 31.12.2021 (referred to, as 'the impugned order') passed by the Commissioner of Central Tax (Appeals-I), Pune.
2.1 Brief facts of the case, leading to this appeal, are summarized herein below:
2.2 The appellants herein, inter alia, are engaged of excisable goods falling under the Central Excise Tariff Act, 1985 and were registered under Central Excise authorities bearing Registration No. AABCB2242FXM002; and upon transition into GST regime are holding 2 E/85979/2022 GSTN No. 27AAABCB2242F1Z6. The appellants avail CENVAT credit of duty/tax on inputs and input services used in such manufacture of final products as per CENVAT Credit Rules, 2004 (CCR of 2004).
2.3 The Department had denied CENVAT Credit involved in certain input services by issuing various Show Cause Notices (SCNs) and statement of demands for the period starting from November, 2012 to May, 2015. The disputed input services were Goods Transport Agency (GTA) service, Custom House Agent (CHA) service, Clearing and Forwarding (C&F) services, Courier services and Logistics & Supply chain services. While the dispute was ongoing in various SCNs, the appellants had paid an amount of Rs.17,81,118/- through CENVAT vide entry No. 1647 dated 16.12.2013 at the time of audit conducted by the Department. In adjudication of the above dispute, the original authority had issued an Order-in-Original dated 17.03.2016, confirming the entire demand of Rs.53,58,640/-. Being aggrieved with the above order, the appellants had filed an appeal before the Commissioner (Appeals), who vide order dated 28.12.2017 had allowed the appeal to the extent of setting aside the demand of CENVAT Credit for Rs.11,98,235/- attributable to the GTA services; and remanded the matter back to the original authority for the determination of the dispute. In respect of the appeal filed by the Department against the CENVAT Credit of Rs.11,98,235/- allowed in favour of the appellants, before the Tribunal. This matter was decided by the Final Order No. A/86820-86823/2019 dated 07.10.2019 disposing the appeal being dismissed as withdrawn. In respect of the remanded matter to the original authority, the Additional Commissioner had allowed CENVAT Credit in relation to C&F services and CHA services amounting to Rs.5,36,034/- and Rs. 2,33,498/-
(total of Rs.7,69,532/-) and upheld the disallowance of balance CENVAT Credit demanded by the Department vide Order-in-Original dated 01.08.2019.
2.4 On the basis of the aforesaid two orders i.e., the Final Order of the Tribunal dated 07.10.2019 and the order of original authority dated 01.08.2019, the appellants had filed refund application dated 18.08.2020 for an amount of Rs. 19,67,766/- (Rs.11,98,234/- + Rs.7,69,532/-) which was received by the Department on 27.08.2020. On scrutiny of the refund application, the original authority had 3 E/85979/2022 rejected the claim vide Order-in-Original dated 28.03.2021 on the grounds of time bar and that an amount of Rs.1,86,648/- is inadmissible as it was paid by utilizing input tax credit in the month of May, 2018. In the appeal preferred by the appellants against the above Order-in-Original dated 28.03.2021, the learned Commissioner (Appeals) vide impugned order dated 31.12.2021, had rejected such appeal by upholding the order of the original authority. Being aggrieved with the above Order-in-Appeal dated 31.12.2021, being the impugned order herein, the appellants have filed this appeal before the Tribunal.
3. Heard both sides and perused the case records. The additional submission made in the form written paper book in this case was also perused carefully.
4. The short issue for determination before the Tribunal is whether the disputed CENVAT credit attributable to input services, is refundable under the provisions of Section 11B of the Central Excise Act, 1944 read with sub-sections (3) of Section 142 of the Central Goods and Services Tax (CGST) Act, 2017 or otherwise?
5.1 In order to appreciate the issues under dispute, the specific legal provisions of the CGST Act, 2017, Central Excise Act, 1944 and CENVAT Credit Rules, 2004 relevant to the dispute are extracted and herein given below for ease of reference:
Central Goods and Services Tax Act, 2017 "Miscellaneous transitional provisions.
Section 142. (1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:
Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.
xxx xxx xxx xxx (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 4 E/85979/2022 provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944):
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
Repeal and saving.
Section 174. (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (1 of 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955), the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), and the Central Excise Tariff Act, 1985 (5 of 1986) (hereafter referred to as the repealed Acts) are hereby repealed....."
Central Excise Act, 1944 "Claim for refund of duty and interest, if any, paid on such duty.
Section 11B. (1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person :
Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act :
Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest.
Explanation.-- Omitted by the Finance (No. 2) Act, 1980.
(2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:5
E/85979/2022 Provided that the amount of duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to--
(a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) unspent advance deposits lying in balance in the applicant's account current maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise;
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act;
(d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(f) the duty of excise and interest, if any, paid on such duty] borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify:....."
5.2 Before I proceed with the present case in hand, the competency of the Tribunal in handling the orders passed under Section 142(2) of the CGST Act, 2017 in appeal before them, has been dealt by the Larger Bench of the Tribunal, and the reference made therein have been clarified in the Interim Order No. 40021/2023 dated 21.12.2023 in the case of Bosch Electrical Drive India Private Limited Vs. Commissioner of Central Tax, Chennai. The relevant paragraphs of the said order is extracted and given below:
"48. The Division Bench of the Tribunal, while referring the matter to the Larger Bench had observed in paragraph 14.1 that an appeal would lie under section 112 of the CGST Act to the Appellate Tribunal constituted under the provisions of the CGST Act against an order passed under sub-section (3) of section 142 of the CGST Act. As noticed above, an appeal would not lie before the Appellate Tribunal constituted under the provisions of the CGST Act because an appeal lies only against an order passed either under section 107 or section 108 of the CGST Act.
49. In the present case, the service tax was paid under the provisions of Chapter V of the Finance Act and refund was claimed under sub-section (3) of section 142 of the CGST Act, under which the claim was required to be disposed of in accordance with the provisions of the existing law. Therefore, even if the service tax had been deposited by the appellant after 01.01.2017, nonetheless the refund of any amount of the CENVAT credit could be claimed only 6 E/85979/2022 under subsection (3) of section 142 of the CGST Act and against this order an appeal will lie to the Tribunal.
50. The reference is, accordingly, answered in the following manner:
An appeal would lie to the Customs, Excise & Service Tax Appellate Tribunal against an order passed under section 142 of the Central Goods and Services Tax Act, 2017."
Thus, it could be seen that the Larger Bench of the Tribunal has held that this Tribunal is the appropriate appellate forum for preferring an appeal against an order passed under Section 142 of the CGST Act, 2017.
6.1 From the facts of the case, it is seen that the appellants had duly followed the procedure and conditions prescribed in complying with the obligations under Cenvat Credit Rules, 2004, in taking credit of input and had also complied with for payment of duty/CENVAT credit in their periodical returns with the department.
6.2 The main ground on which the refund application of the appellants was held as not entertainable in the impugned order is, that the refund claim for an amount of Rs.11,98,234/- consequent to the Final Order of the Tribunal dated 07.10.2019, should have been filed within one year from the date of Order in Appeal dated 28.12.2017, i.e., on or before 27.12.2018, and therefore such claim is time barred. In respect of refund claim for an amount of Rs.7,69,532/-, the impugned order has concluded that though the same is not barred by limitation, on account of absence of evidential proof that the duty incidence was not passed on by the appellants, such refund was also held as not admissible, by upholding the order of the original authority.
6.3 In this regard, I find that the second proviso to Section 11B ibid specifically provide that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest. Further, the explanation clause to Section 11B ibid also state that "relevant date" in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, means the date of such judgment, decree, order or direction. It is on record that the appellants have paid the duty under protest vide their letter dated 11.08.2004 and have also filed the refund claim within one year of the order of the Tribunal. Therefore, I find that the order of the learned Commissioner 7 E/85979/2022 (Appeals) in rejecting the part of refund for Rs.11,98,234/- as time barred, does not stand the legal scrutiny.
6.4 In this regard, I find that the provisions of Sections 142(3) and 142(9)(b) of the CGST Act, is a transitional arrangement wherein it has been specifically provided that such provisions apply as a non- obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub- section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142(9)(b) of the CGST Act, 2017, in dealing with refund of 'CENVAT credit'. It is also on record, that with respect to fulfilment of unjust enrichment angle in the case of the present refund, the appellants had produced a certificate from the Chartered Accountant and the same has been examined by the first appellate authority with respect to whether the incidence of excess duty paid has been passed on by the appellants to any other person or not. On finding that such amount was expensed off in the profit and loss account for the year 2017-18, learned Commissioner (Appeals) had rejected the claim for refund. However, I find that the appellants have stated that the said amount has been paid under protest and also submitted the Chartered Accountant Certificate explaining that the said amount of Rs.7,69,532/- claimed as refund has not been passed to any other person along with copy of their books of accounts. I also find that the learned Counsel had relied upon the judgement of the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. I.T.C. Bhadrachalam - 2015 (319) E.L.T. 547 (S.C.) to state in case where duty paid under protest and the assessee not having passed on the incidence of such duty burden to the ultimate consumer, enable that appellant in that case eligible for refund. Therefore, I find that the order of the learned Commissioner (Appeals) in rejecting the part of refund for Rs.7,69,532/- on account of unjust enrichment, is not factually correct, as it the amount is refundable, then it should have been credited to the Consumer Welfare Fund in terms of Section 11B ibid.
8E/85979/2022
7. Further, upon introduction of GST regime, the transitional arrangements have been provided under Section 142 of CGST Act, to enable the CENVAT credit, if refundable, to be paid in cash to the eligible persons, as there was no way that such disputed CENVAT credit could be used by the assessee in payment of tax on output service or duty on final products. Further, I also find merit in the argument of the learned Counsel for the appellants that they are eligible for refund of duty in cash under Section 11B(2)(d) ibid, inasmuch as the phrase 'duty of excise' used in Section 11B(2)(d) ibid refers to duties of excise leviable under Section 3 of the Central Excise Act, 1944 and it also includes CENVAT credit, which is nothing but such duty of excise paid on inputs or service tax paid on input services, which have been allowed for taking credit in terms of Rule 3 of the CCR. In view of the above discussions, I find that the impugned order is not legally sustainable and the appellants are eligible for refund of excess CENVAT credit paid by them, and specifically allowed to be refunded in terms of Section 142(9)(b) of the CGST Act, 2017.
8.1 From the detailed discussions as above, it is reasonable to conclude that when the Central Excise Act, 1944 amongst other laws relating to old tax regime was repealed by Section 174 of the CGST Act, 2017 and that the CCR is also being superseded vide Notification No.20/2017-C.E. (N.T.) dated 30.06.2017, by the Central Government for smooth implementation of transfer to GST regime in indirect taxation, I find that the provisions of Section 142 of the CGST Act, 2017 are sufficient to provide for the tax administration for sanction of cash refund in circumstances stated therein, and I find that there is no need and it is not legally feasible to make any specific provision in CENVAT statute itself, for enabling cash refund of excess CENVAT credit relating to earlier regime while moving to the new GST regime.
8.2 Further, I have also gone through the various case laws cited by both sides to support their respective stand. However, I find that the Hon'ble Bombay High Court had an occasion to examine identical issues in a similar matter before them, in the case of Combitic Global Caplet Pvt. Ltd. Vs. Union of India in Writ Petition No.729 of 2021 with W.P. No.1228 of 2021, and being jurisdictionally binding on this Regional Bench of the Tribunal, I would like to be guided by such judgement delivered recently. In the judgement delivered on 10.06.2024, the 9 E/85979/2022 Hon'ble Bombay High Court have held that Sub-section (3) of Section 142 of the CGST Act very clearly states that any amount eventually accruing shall be paid in cash and directed the departmental authorities/ sanctioning authority for refunding the amount of duty refundable to the petitioner in cash instead of credit in CENVAT account. The relevant paragraphs of the said judgement of the Hon'ble Bombay High Court are extracted and given below:
"8 It is these orders which are impugned in this petition and the stand taken by petitioner is that Section 142(3) of the Central Goods And Services Tax Act 2017 (the Act) clearly says, w.e.f 1st July 2017, in view of the effect of change in the regime, i.e., when the GST regime was introduced, any refund that was payable to petitioner has to be paid in cash. Mr. Sridharan submitted that since the CENVAT regime has come to an end, credit of amount payable to petitioner to the CENVAT account would make no sense because petitioner will not get the money or credit thereof under the GST regime. Mr. Sridharan states since the government cannot retain any amount which is not due to it, the amount so collected is allowed to be paid over in cash as provided in sub Section (3) of Section 142 of the Act.
xxx xxx xxx xxx 10 Section 142(3) of the Act reads as under:
"142:- Miscellaneous transitional provisions :-
(1) ******************* (2)******************* (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 (1 of 1944):
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
********************************"
11 In our view, Section 142(3) of the Act is very clear in as much as, it says " 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 .............. and any amount eventually accruing ........ shall be paid in cash ......". It is very widely worded in as much as it uses the expression "CENVAT credit" and also "any other amount paid". Even if, we take it that petitioner has made voluntary deposit, that amount has to be shown as CENVAT credit in the account of petitioner. In 10 E/85979/2022 the alternative, it would certainly come under the category "or any other amount paid". Therefore, either way the amount paid by petitioner, admittedly, has to be refunded. In fact, it is also admitted that an amount of Rs.10,48,11,737/- is refundable to petitioner.
The credit of refund is the only issue because Mr. Adik, as an officer of this court and in fairness, agreed that Government cannot retain any amount without any authority of law.
12 Sub-Section (3) of Section 142 of the Act very clearly says "any amount eventually accruing shall be paid in cash". In the circumstances, we are of the opinion that respondents ought to have directed the sanctioning authority to refund the amount of duty refundable to petitioner in cash instead of credit in CENVAT account, 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.
13 Therefore, Rule made absolute in terms of prayer clauses (a) and
(b) of both petitions, which are quoted above.
14 The amount shall be paid together with accumulated interest in accordance with law within four weeks of this order being uploaded."
8.3 In this regard, I find that Hon'ble Supreme Court have held in the case of Union of India Vs. Kamlakshi Finance Corporation Limited - 1991 (55) E.L.T. 433 (S.C.) that judicial discipline is required to be followed in proper administration of tax laws. The relevant paragraph of the said order is as follows:
"6........The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws."
9. In view of the foregoing discussions and analysis, I do not find any merits in the impugned order passed by the learned Commissioner (Appeals) to the extent it has rejected the refund of CENVAT credit, which is contrary to the legal provisions of Section 142(3) and Section 142(9)(b) of the CGST Act, 2017 read with Section 11(B) of the Central Excise Act, 1944 and thus, it does not stand the scrutiny of law. Therefore, by setting aside the impugned order dated 31.12.2021, the appeal is allowed in favour of the appellants, with consequential relief, as per law.
11E/85979/2022
10. In the result, the impugned order dated 31.12.2021 is set aside and the appeal filed by the appellants is allowed in their favour.
(Order pronounced in the open court on 25.08.2025) (M.M. PARTHIBAN) MEMBER (TECHNICAL) Sinha