Non-Mentioning of CVD and SAD in ER-1 not a ground to deny Cenvat Credit: CESTAT [Read Order]

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has recently, in an appeal filed before it, held that non-mentioning of CVD and SAD in ER-1 is not a ground to deny cenvat credit.

The aforesaid observation was made by the Tribunal when an appeal was filed before it by the assesse M/s Clariant Chemicals India Ltd, as against the confirmation by the Commissioner of Central Tax, Central Excise & Service Tax (Appeals), Raigarh ,of the order passed by the Assistant Commissioner, CGST & CX, Division-III, Raigad Commissionerate, rejecting the refund claim of Rs.11,04,057/ filed by the Appellant against CVD and SAD paid in respect of bill of entry dated 29.06.2017 in the pre-GST regime.

Facts of the case being that the Appellant is a manufacturer of excisable goods who procured certain inputs such as pigments, poly-ether alcohols etc. from Germany, it had filed the bill of entry No. 2282496 on 29.06.2017 as well as cleared the goods upon payment of Customs duty including Countervailing Duty (CVD) and Special Additional Customs Duty (SAD) on dated 10.07.2017 vide challan.

The goods being received by the Appellant at its factory premises on 19.07.2017, the said payment of CVD and SAD could not be reflected in the ER-I Return as the due date was already over before the goods reached the factory.

Subsequently, the Appellant, as it could not avail the credits accumulated against payment of CVD and SAD, sought for refund of the CENVAT Credit under Section 11B of the Central Excise Act, 1944 read with Section 142 of the GST Act in this post GST regime, but the refund sanctioning authority rejected the refund vide Order-in-Original dated 06.09.2018 And it is due the Appellant’s unsuccessful attempt before the Commissioner (Appeals), the Appellant has brought the dispute to the Tribunal.

“It is an admitted fact of the parties that the said CENVAT Credit balance was not carried forward to the Appellant’s account on the appointed date since it was not due on the said day also”, Dr. Suvendu Kumar Pati, the Judicial Member of the Tribunal noted.

“Therefore, in view of the clear provision contained under Section 142(6)(a) of the CGST Act, the Claimant/Appellant is eligible to get the refund of credit by cash except where unjust enrichment is alleged or established against the Appellant.”, he further added.

Thus, allowing the assessee’s appeal and subsequently setting aside the impugned order, he ruled:

“Appellant is also otherwise eligible to go for availment of transitional credit through filing required forms in Tran-I as per the order passed by the Hon'ble Supreme Court on 22nd July, 2022, but in view of the observation of this Tribunal read with Section 142(6)(a) of the CGST Act that such CENVAT Credit amount shall be paid to the Appellant in cash, it can’t avail dual benefits once order of this Tribunal is duly complied by the Respondent Department by the closing date of the window”.

To Read the full text of the Order CLICK HERE

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