Custom, Excise & Service Tax Tribunal
Rieter India Pvt Ltd vs The Commissioner Of Central ... on 8 July, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH
Excise Appeal No. 86261 of 2021
(Arising out of Order-in-Appeal No. PUN-EXCUS-001-APP-294/2020-
21 dated 17.02.2021 passed by the Commissioner of (Appeals-I),
Central Tax, Pune)
Rieter India Pvt. Ltd. .....Appellant
Gate No. 768/2 Village Wing
Shindewadi-Bhor Road, Ral. Khandala,
Dist. Satara, Maharashtra
VERSUS
Commissioner of Central Tax, Kolhapur .....Respondent
Vasant Plaza, Commercial Complex, Rajaram Road, Bagal chowk, Kolhapur APPEARANCE:
Ms Payal Nahar, Advocate for the appellant Shri Dinesh Nanal, DC(AR) for the respondent CORAM:
HON'BLE MR. AJAY SHARMA, MEMBER (JUDICIAL) FINAL ORDER No: 86061/2025 DATE OF HEARING : 13.03.2025 DATE OF DECISION : 08.07.2025 Per: AJAY SHARMA This appeal has been filed against the impugned Order-in-
Appeal dated 17.2.2021 passed by the Commissioner (Appeals-
II) Central Tax, Pune rejecting the appeal filed by the appellant for cash refund of Cenvat credit of Countervailing duty (CVD) & -2- E/86261/2021 Special Additional Duty (SAD) u/s. 142(3) of Central Goods & Service Tax Act, 2017.
2. The facts of the case, briefly stated, are that the appellant is manufacturer of excisable goods and were importing various type of inputs for manufacturing them. They procured certain goods under Advance Authorisation Licence issued to them under Foreign Trade Policy, 2015-20. When they filed application for redemption of Advance Authorisation with the Director General of Foreign Trade Office, vide deficiency letter dated 17.3.2017 they were informed by the said office that the application is deficient due to excess imports and they were directed to regularize the excess import by paying applicable customs duty with interest in accordance with para 4.49 of the Foreign Trade Policy.
3. In compliance with the letter and to fulfill the obligation of the said advance license, the appellant paid the applicable customs duties CVD and SAD with interest on imported goods on 18.1.2019. Since the payment was made after the implementation of GST w.e.f. 1.7.2017 and there was no provision to avail/utilize the credits on CVD & SAD paid by them on 18.1.2019, they filed a refund claim under section 142(3) ibid for refund of Cenvat credit of the CVD & SAD, in cash.
4. The said claim of cash refund was rejected by Adjudicating Authority vide Order-in-Original dated 30.1.2020 on various grounds including the ground that the CVD & SAD paid by them -3- E/86261/2021 is not admissible as Cenvat Credit under Cenvat Credit Rules, 2004. On Appeal filed by the Appellant, the learned Commissioner (Appeals) though agreed that the CVD & SAD paid are admissible as Cenvat credit but rejected the appeal by holding that they are not eligible for cash refund u/s.142(3) ibid.
5. The sole issue for consideration is whether the Appellant is entitled for cash refund of CVD and SAD paid post-GST on goods imported pre- GST i.e. prior to 1.7.2017, in terms of Section 142(3), Central Goods & Service Tax Act, 2017?
6. I have heard learned counsel for the appellant and learned Authorised Representative on behalf of Revenue and perused the case records including the written submissions/synopsis alongwith case laws placed on record. The Adjudicating authority rejected the refund claim on various grounds but the learned Commissioner (Appeals), in a challenge to that order, vide impugned order has held that the instant case falls under the category of 'differential duty' and would be eligible for Cenvat credit. It has also been held by the learned Commissioner that the adjudicating authority was not right in questioning the admissibility of Cenvat credit on CVD & SAD paid by the appellant, still he rejected the appeal on the ground that under the old law i.e. Cenvat Credit Rules, 2004 the appellant was entitled to take credit of CVD/SAD but not as cash refund u/s. 142(3) ibid.
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E/86261/2021
7. In order to appreciate the issue, I feel it appropriate to extract the relevant provisions i.e. Section 142(3) Central Goods & Service Tax, 2017 and Section 11B(2), Central Excise Act, 1944 which are as under:-
"Central Goods & Service Tax, 2017 Section 142 ̶ Miscellaneous transitional provisions:-
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 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."
xxx xxx xxx"
"Central Excise Act, 1944 Section 11B - Claim for refund of duty and interest, if any, paid on such duty. --
(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 -5- E/86261/2021 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 (40 of 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 subsection (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."
(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:
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;-6-
E/86261/2021
(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:.....
xxx xxx xxx"
8. It is abundantly clear that Section 142 ibid is a transitional provision. A reading makes it explicit that it has an overriding effect subject only to the principle enshrined in Section 11B(2) ibid which primarily deals with 'unjust enrichment'. It mandates for cash refund of any amount of Cenvat credit paid under the existing law. The amount of CVD and SAD totaling Rs. 13,41,195/-paid by the appellant, on 18.01.2019 to regularize obligation under Advance Authorisation granted them prior to GST regime, was admissible to them as a Cenvat credit under erstwhile Cenvat Credit Rules, 2004 however w.e.f. 01.07.2017, GST came into force and the Cenvat Credit Rules, 2004 were no longer in existence, having been superseded by Notification No. 20/2017-CE(NT) dated 30.06.2017. Hence the appellant was not in a position to avail the Cenvat credit of such duties paid by them in absence of enabling provision and therefore they filed a claim for cash refund. There is no dispute regarding the fact that the Appellant had borne the incidence of CVD and SAD. Therefore, the bar of unjust enrichment is not attracted and the refund is legally tenable u/s 11 B(2) ibid. Although the payment of CVD & SAD had been made in the year 2019 i.e. during GST regime but it pertains to the period pre-GST i.e. prior to 1.7.2017 as the deficiency letter issued by DGFT was itself of -7- E/86261/2021 17.3.2017 and admittedly its credit is no longer available under the GST regime.
9. Learned Commissioner's observation that for contravention of provisions of Advance Authorization, CVD & SAD have been paid which cannot be refunded, is not correct. Deficiency letter was issued by DGFT to appellant for paying the customs duty with interest in order to regularize their case in accordance with Foreign Trade Policy without there being any allegation of fraud etc. and the said letter cannot be treated as a demand or recovery notice issued u/s. 142 of Customs Act, 1962. Although the learned Commissioner held that the additional duty of customs paid by the appellant for the imports made prior to introduction of GST, was available to them as Cenvat credit under the existing law but at the same time he also held that there was no provision to grant cash refund for such CVD/SAD paid and he took recourse to Cenvat Credit Rules, 2017 also while rejecting the plea of cash refund.
10. So far as applicability of Cenvat Credit Rules, 2017 which superseded the CCR, 2004 vide notification No.20/2017-CE (NT) dated 30.6.2017 is concerned, I am of the view that although the CVD & SAD were paid on 18.1.2019 but it pertains to the imports of period prior to coming into force of GST i.e. prior to 30.6.2017 and the department's view is not correct that in view of Notification dated 30.6.2017 which brought the CCR, 2017 into operation, there was no provision of availing Cenvat credit -8- E/86261/2021 on CVD & SAD payments and the appellant cannot claim the same. It is admitted position that ER-1 was required to be filed by 30.06.2017 for carrying forward the Cenvat Credit balance as per Section 140 ibid and TRAN-1 up to 27.12.2017, whereas the CVD & SAD were paid by the appellant only on 18.1.2019. So far as the decision of the Hon'ble Jharkhand High Court, as cited by learned Authorised Representative in the matter of Rungta Mines Limited v. Commissioner of CGST & C Excise, Jamshedpur; 2022-TIOL-252-HC-JHARKHAND-GST = 2022 (67) G.S.T.L. 180 (Jhar.) is concerned, the facts therein were not similar. The relevant paragraphs of the said decision extracted hereunder clearly establish that the facts in the case before the Hon'ble High Court were different:--
"xxx xxx xxx
50. It is not in dispute that the petitioner has claimed the credit of service tax involved in the present case paid on "port services" as "input service" in ST-3 return filed on 22-9-2017, though they were not entitled to claim such a credit. It is further not in dispute that the petitioner did not include the impugned service tax paid on "port services" in its ER-1 return and accordingly was neither entitled to include nor included the same as transitional credit in TRAN-1 under CGST Act. As per the notification (Annexure-5) extending the date of filing TRAN-1 to 31-10-2017, the same was in relation to certain service tax issues which were paid after 30-6-2017 under reverse charge basis to cover instances of bills raised on 30-6-2017 since credit is available only if the payment is made and the payment in such cases could be made only after 30- 6-2017. However, in the instant case the bill was admittedly generated on 23-5-2017, services availed and bill amount including service tax was paid in -9- E/86261/2021 April, 2017 but the original bill did not reach the petitioner for unknown/undisclosed reasons.
51. It is apparent from the impugned orders that the specific case of the respondent is that the petitioner had claimed Cenvat credit under ST-3 return thereby treating the services involved in the present case as their input services used for providing output service, whereas they are not output service provider and the same cannot be used for providing output services. Therefore, it cannot be their input services under Rule 2(l) of Cenvat Credit Rules, 2004. I am also of the considered view that the petitioner could not have claimed the impugned service tax on port services in ST-3 return as they were registered for discharging their liability under the service tax only on reverse charge mechanism. Rather it is the case of the petitioner that they had included the impugned service tax in ST-3 Return under compelling circumstances of non-receipt of original invoice dated 23-5-2017 and this was done only attempting to save their credit which they had failed to claim through ER-1 return and then as transitional credit through TRAN-1 under Section 140(1) of the CGST Act. Thus, the authority has rightly held that petitioner had wrongly claimed Credit of the impugned service tax under ST-3 return and omitted to claim the impugned service tax as Cenvat credit in ER-1 Return.
52. Further case of the respondent is that the petitioner as a manufacturer was eligible to claim Cenvat credit on impugned service i.e. "port services" and should have claimed the credit in their ER-1 Return within the prescribed time and accordingly could have claimed transitional credit through TRAN-1 under Section 140 of CGST Act. Thus, late receipt of the original invoice which has been cited as the reason for failure to claim Cenvat credit under the existing law and transitional credit under Section 140(1) of the CGST Act was wholly attributable to acts and omissions of the petitioner and its service provider of the "port services" and the respondent authorities had no role to play. The petitioner had failed to avail the opportunity to claim Cenvat credit of service tax on port services in terms
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E/86261/2021 of the existing law read with Section 140 of CGST Act and had no existing right of refund on the date of coming into force of CGST Act. The petitioner having not used the port services for export was not entitled to claim refund under the existing law. The petitioner was also not entitled to refund on account of the fact that the petitioner had already taken credit of the service tax paid on port services in ST-3 Return of service tax although admittedly the petitioner was not entitled to take such credit in ST-3 Return. On account of aforesaid three distinct reasons the petitioner was rightly held to be not entitled to refund under Section 142(3) of CGST Act by the impugned orders."
11. In the instant matter the cash refund is claimed because CENVAT credit could not be availed during pre-GST period as stated earlier. The issue involved herein is no more res integra in view of number of decisions of this Tribunal. A co-ordinate Bench of the Tribunal in the matter of Mithila Drugs Pvt Ltd. v. Commissioner, Central Goods and Service Tax; (2023) 11 Centax 338 (Tri.-Del.) decided the identical issue in favour of the assessee, the relevant portion whereof is extracted hereunder:− " 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 authorisation scheme. It is also not disputed that the appellant have paid the CVD and SAD in August, 2018 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,
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E/86261/2021 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."
12. Learned Commissioner while rejecting the appeal of the appellant has also relied upon the decision of a co-ordinate Bench of the Tribunal in the matter of M/s. Servo Packaging Ltd. Vs. Commr. Of CGST & C.Ex. Puducherry; 2020(373) ELT 550 (Tri.-Mad) which is misplaced in the light of several subsequent decisions of this Tribunal and all of which consistently held that CVD & SAD paid post 1.7.2017 for pre-GST imports and credit could not be availed, are refundable in cash u/s. 142(3) ibid. One of such decisions in the matter of Sri Chakra Poly Plast India Pvt. Ltd. Vs. Commr. Of Central Tax, Hyderabad; (2025) 29 Centax 299 (Tri.-Hyd.) is very recent in which the co-ordinate bench of the Tribunal despite referring the decision of Servo Packaging (supra) decided the issue in favour of the assessee, the relevant portion whereof are extracted as under:-
"xxx xxx xxx
14. In all these case laws, the issue was
identical i.e., as to whether CVD+SAD as part of Custom Duties paid subsequent to 01.07.2017 on account of non-fulfilment of Export Obligation, are eligible for cash refund when the Appellant cannot take these amounts as Cenvat Credit. The co-ordinate Benches of Tribunal have been consistently holding that the Appellant would be eligible for Cenvat Credit. The issue in the present appeal is squarely is covered by these decisions.
15. In the case of OSI Systems Pvt Ltd v. CCT, Rangareddy [2022 (9) TMI 801 - CESTAT Hyderabad],
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E/86261/2021 this Bench while dealing the issue as to whether the Service Tax paid on RCM basis subsequent to 01.07.2017, which otherwise is eligible as Cenvat Credit, can be taken as cash refund under Sec.142(3) of CGST Act, 2017 was considered and has held as under:
"7. Having considered the rival contentions, I find that under transitional provision under section 142(3) of CGST Act, the limitation has been done away with and the only thing required for refund under the facts and circumstances is to see whether unjust enrichment is attracted. In the facts and circumstances, I hold that no unjust enrichment is attracted as the appellant have admittedly paid service tax in August, 2018 out of their own pocket. Accordingly, I allow this appeal and set aside the impugned order. The adjudicating authority is directed to grant refund within a period of 60 days from the date of receipt of copy of this order along with interest under section 11BB of the Central Excise Act. " [Emphasis supplied]
16. I find that the ratio laid down in the above case law is also squarely applicable to the facts of the present case.
17. Now coming to the case law of Servo Packaging Ltd and Aurobindo Pharma Ltd cases, cited by learned AR, subsequently Chennai Bench itself has passed another Order holding that Appellant would be eligible for cash refund. Further, the view of the Bench in the cases of Servo Packaging Ltd & Aurobindo Pharma Ltd were prior to the clear view brought in by the Larger Bench in the case of Bosch Electrical Drive India Pvt Ltd (cited supra), which has held as under:
"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 under subsection (3) of section 142 of the CGST Act and against this order an appeal will lie to the Tribunal.[Emphasis supplied]
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18. Therefore, I find all the case laws cited by learned AR cannot be applied now. On the other hand, the decisions of Mithila Drugs Pvt Ltd (supra), Clariant Chemicals India Ltd (supra) and ITCO Industries Ltd (supra) cited by learned Counsel read with Bosch Electrical Drive India Pvt Ltd (Larger Bench) are squarely applicable. Therefore, following the decisions of these case laws, I set aside the impugned Order and allow the Appeal with consequential relief. The Adjudicating Authority is directed to grant the refund along with interest, which is to be calculated from the initial date of filing the refund claim."
13. In view of the discussions made hereinabove, I am of the considered opinion that CVD and SAD paid post-GST on imports made pre-GST i.e. prior to 01.07.2017, where CENVAT Credit could not be availed, are eligible for cash refund in terms of section 142(3) ibid. The impugned order is accordingly set aside and the appeal is allowed with consequential relief, if any, in accordance with law.
(Pronounced in open Court on 08.07.2025) (Ajay Sharma) Member (Judicial) //SR