The Mumbai Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) granted relief to JSW Steel by permitting the refund of Countervailing Duty (CVD) and Special Additional Duty (SAD ) paid in cash after July 2017 under Section 142(3) of the Central Goods and Service Tax ( CGST ) Act.

JSW Steel Limited,appellant-assessee manufactured steel and imported iron ore through 17 Bills of Entry under provisional assessment. After the assessments were finalized, it paid CVD and SAD of ₹9,80,040 between July 2018 and July 2019 but could not claim CENVAT credit as it was discontinued under GST.

The assessee then applied for a cash refund under Section 142(3) of the CGST Act, but the refund was denied by both the Refund Sanctioning Authority and the Commissioner (Appeals). The assessee challenged the Commissioner (Appeals) order before this forum.

The assessee counsel, relied on several past decisions and argued that the issue was settled in favor of refunding CVD and SAD paid after July 1, 2017, under Section 142(3) of the CGST Act. He also cited a Bombay High Court ruling that said the law covered refund of not just CENVAT credit but any amount paid. He asked for the Commissioner (Appeals) order to be set aside.

The department’s representative supported the Commissioner (Appeals) order. He referred to a Jharkhand High Court decision saying Section 142(3) does not allow refunds if the law does not provide that right. He noted that the Commissioner found CENVAT credit was not refundable to non-exporting manufacturers, so refund under Section 142(3) was not allowed.

He also mentioned a Madras High Court ruling that said such credit could only be carried forward electronically, not refunded. He argued that the Commissioner (Appeals) order should not be changed.

A single member bench of Dr.Suvendu Kumar Pati (Judicial Member) examined the submissions and relevant case laws on refund of CVD and SAD paid in cash under Section 142(3). It noted that the Larger Bench in the Bosch Automotive Electronics case allowed such refunds.

The tribunal also referred to the Sri Chakra Poly Plast India case, which supported granting cash refunds of CVD and SAD.

It relied on earlier decisions that held taxpayers were eligible for Cenvat Credit and that refunds could be given if no unjust enrichment occurred, as seen in the OSI Systems case. The bench rejected conflicting decisions cited by the authorized representative because they were made before the Larger Bench ruling in Bosch Electrical Drive.

The appellate tribunal clarified that some judgments cited by the department were in different contexts and did not apply to refundable credits under Section 142(3). It also referred to its previous order in SI Group India, which confirmed that cash refunds under Section 142(3) were allowed based on judicial precedents.

Since Section 146(6) required refund claims to be decided under existing laws and allowed refund of admissible credit in cash, the CESTAT held the assessee was entitled to a refund of CVD and SAD paid, even if earlier laws did not provide for direct refund.

Therefore, the bench allowed the appeal, set aside the lower order, and directed the department to pay the assessee ₹9,80,040 with interest within two months.

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