The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai allowed refund on the ground that payment of CVD (Countervailing Duty) and SAD (Special Additional Duty) for imports made prior to 30. 06.2017.
The appellants, M/s. ITCO Industries Ltd. obtained two advance authorizations dated 29.06.2016 and 05.01.2017 issued by the Additional Directorate General of Foreign Trade, Bengaluru. Against such advance authorizations, the appellant imported raw materials without payment of duty. The appellants did not meet the export obligation and consequently a deficiency letter dated 15.03.2019 was issued to them directing them to regularize excess import of inputs made by them. Thereafter, a demand notice was issued by the office of the Commissioner of Customs, Chennai for non-fulfilment of export obligation under the advance authorizations issued to them. The appellant then paid Customs duties along with CVD and Special Additional Duty (SAD) with applicable interest vide T.R. Challan dated 04.04.2019.
Meanwhile, G.S.T was introduced with effect from 01.07.2017 and the appellants were unable to avail input credit of CVD and SAD paid by them. They were also not able to transfer such credit to GST regime to TRAN 1 credit as the date of filing TRAN 1 procedure had expired on 27.12.2017. They therefore filed refund claim of Rs.9,76,684/- and Rs.3,07,305/- in regard to above appeals. The original authority rejected the refund claims holding that the appellant is not eligible for CVD and SAD paid by them. They filed appeals against such orders before Commissioner (Appeals) who upheld the same, hence the appeal is preferred before the CESTAT.
The Tribunal in the case of Circor Flow Technologies and Mithila Drugs Pvt. Ltd. had analysed a similar issue wherein it was held 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 and 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”.
Sulekha Beevi, Judicial Member said “After appreciating the facts and evidence as well as applying the principles of law laid in the above decisions, I am of the view that the rejection of refund claims cannot be justified.”
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