Custom, Excise & Service Tax Tribunal
New Age Laminators Private Limited vs Commissioner, Central Excise &Amp ... on 16 March, 2022
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E/A Nos. 50991-50992/2021
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO. II
Excise Appeal No. 50991 of 2021
(Arising out of order-in-appeal No. 52-53(SM)/CE/ JPR/2021 dated 09.03.2021 passed
by the Commissioner (Appeals), Central Excise & Central Goods & Service Tax, Jaipur).
M/s New Age Laminators Pvt. Limited Appellant
E-1028, RIICO Industrial Area
Chopanki, Bhiwadi, Distt - Alwar
Rajasthan.
VERSUS
Commissioner, Central Excise, Goods Respondent
and Service Tax, Surya Nagar, Alwar, Rajasthan.
AND Excise Appeal No. 50992 of 2021 (Arising out of order-in-appeal No. 52-53(SM)/CE/ JPR/2021 dated 09.03.2021 passed by the Commissioner (Appeals), Central Excise & Central Goods & Service Tax, Jaipur). M/s New Age Laminators Pvt. Limited Appellant E-1028, RIICO Industrial Area Chopanki, Bhiwadi, Distt - Alwar Rajasthan.
VERSUS Commissioner, Central Excise, Goods Respondent and Service Tax, Surya Nagar, Alwar, Rajasthan.
APPEARANCE:
Sh. G. G. Gupta, Advocate for the appellant Shri Ravi Kapur, Authorised Representative for the respondent CORAM:
HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER Nos. 50256 - 50257/2022 DATE OF HEARING: 14.01.2022 DATE OF DECISION: 16.03.2022 2 E/A Nos. 50991-50992/2021 ANIL CHOUDHARY:
The issue involved is whether refund has been rightly rejected on the CVD + SAD paid for regularisation of advance licence (import licence), which have been deposited on after 01.07.2017 (implementation of GST).
2. Brief facts of the case are that the appellant, holder of Central Excise registration No. AABCN3778JEM002 are engaged in manufacture of Automotive Metalised Polyester Laminated Craft Paper falling under sub heading 4811 of the first schedule to the Central Excise Tariff Act, 1985. The appellant imported inputs i.e. Sack Kraft Paper and LDPE without payment of Customs duty, before roll out of GST, against Advance Licence. As per foreign trade policy, when the export obligations are not fulfilled against a particular authorisation, the assessee is required to pay forgone customs duty alongwith interest. It appeared that the appellant had failed to fulfil their export obligations within the prescribed time limit, therefore they are liable to pay Customs duties i.e. Basic Customs Duty, Countervailing Duty (CVD), Special Additional Duty (SAD) & Cess. The appellant paid Rs. 5,77,839/- vide challan No. 34 dated 15.05.2019 and Rs. 2,07,148/- vide challan No. 60477 dated 22.05.2018. As the appellant had deposited the duties after implementation of GST, therefore they are not eligible to claim cenvat credit of CVD and SAD, as there is no provision in GST to avail input credit of the duties paid for regularization of bonafide default under Advance authorisation (relating to erstwhile regime of Central Excise), hence the appellant filed refund claims. 3
E/A Nos. 50991-50992/2021
3. Show cause notices were issued to the appellant proposing therein rejection of the fund claims on the ground that the duty was paid by the appellant after pointing out by the competent authority for failure of their export obligation, and therefore the amounts paid do not fall under eligible cenvat credit and as the credit itself is inadmissible, the refund filed by them is not fit for consideration in terms of Section 142(6) of CGST Act, 2017. After considering the submissions of the appellant the Court below rejected the refund claims vide the order-in- original.
4. Being aggrieved, the appellant preferred appeals before the Commissioner (Appeals) who vide the common impugned order observed that Rule 3 of Cenvat Credit Rules allow credit of additional duties of CVD and SAD paid under Section 3 of the Customs Tariff Act. Further, observed that on implementation of GST w.e.f. 01.07.2017, cenvat credit of CVD and SAD could not be availed. Further observed that the import made by the appellants under advance authorisation was a conditional import and hence availing cenvat credit of duty paid upon failure to fulfil the condition would defeat the very purpose / mandate of advance licence. Accordingly, pleased to reject the refund claims.
5. Being aggrieved, the appellants are before this Tribunal.
6. Heard the parties and perused the record.
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 30.06.2017 is not disputed under the advance 4 E/A Nos. 50991-50992/2021 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 the erstwhile regime of Central Excise prior to 30.06.2017. 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 alongwith interest under Section 11BB of the Central Excise Act. The impugned orders are set aside.
9. Both the appeals are allowed.
(Pronounced on 16.03.2022).
(Anil Choudhary) Member (Judicial) Pant