Exporters Can Seek Re-credit Despite Time-Barred Rebate: Bombay HC allows Fresh Application u/s 142(3) CGST [Read Order]
SUMMARY: The petitioners were directed to file a fresh substantive application seeking re-credit of the excess duty paid, holding that the rejection of a time-barred rebate claim does not preclude an assessee from seeking the return of excess duty under Section 142(3) of the CGST Act.
The Bombay HighCourt disposed of writ petitions filed by exporters challenging the rejection of their rebate claims on the ground of limitation. The Court allowed the petitioners to file a fresh substantive application seeking re-credit of the excess duty paid, holding that the rejection of a time-barred rebate claim does not preclude an assessee from seeking the return of excess duty under Section 142(3) of the CGST Act.
As per the facts, the petitioners, including ABB Limited and Siemens Ltd, were manufacturers who exported certain goods upon payment of duty by debiting their CENVAT Credit accounts under Rule 18 of the Central Excise Rules, 2002. They subsequently filed rebate claims for the excise duty paid on these exported goods under Notification No. 21/2004-C.E. (N.T.). However, these rebate claims were rejected by the authorities solely on the ground that they were barred by limitation.
The dispute arose as the petitioners, acknowledging the Supreme Court's decision in Sansera Engineering Limited regarding limitation, contended that the duty paid on exported goods was essentially an excess payment, as no duty is leviable on exports. They argued that the department was obligated to return this excess duty in the same form (re-credit) under Section 142(3) of the CGST Act, regardless of the limitation bar on the specific rebate claim. The respondents opposed the petitions, maintaining that the relief was appropriately denied.
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When the matter reached the High Court, the bench of Justices G.S. Kulkarni and Justice Aarti Sathe examined the alternate plea raised by the petitioners regarding the re-credit of duty. The Court observed that while the petitioners were entitled to canvass their entitlement to the return of excess duty, this specific assertion needed to be made through a substantive application before the designated officer rather than incidentally in the writ proceedings.
The Court permitted the petitioners to file a fresh application within four weeks. The court directed the Assistant Commissioner to decide the application expeditiously within six weeks, without being influenced by the impugned orders rejecting the rebate claims on limitation grounds.
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