Relief to JSW Steel: CESTAT Orders Cash Refund of ₹45.54 Lakh CVD & SAD Paid Post-GST Implementation [Read Order]
The Tribunal held that Section 142(3) allows refund of CVD and SAD paid after 1st July 2017, provided unjust enrichment does not apply
The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) allowed a cash refund of ₹45,54,866 to JSW Steel towards Countervailing Duty (CVD) and Special Additional Duty (SAD) paid after the introduction of GST.
JSW Steel, a leading steel manufacturer, imported iron ore and iron ore fines under provisional assessments. Following the finalisation of assessments, the company discharged CVD and SAD between July 2018 and July 2019.
However, since the CENVAT Credit mechanism had been discontinued after 1st July 2017 due to the rollout of GST, JSW Steel sought a cash refund under Section 142(3) of the CGST Act, 2017. The refund was rejected by the adjudicating authority and later confirmed by the Commissioner (Appeals), prompting the company to approach the Tribunal.
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Before the tribunal, counsel for JSW Steel argued that judicial precedents, including the Larger Bench ruling in Bosch Automotive Electronics India Pvt. Ltd., had conclusively settled that CVD and SAD paid post-GST are refundable in cash if CENVAT Credit is unavailable.
The counsel relied on the Bombay High Court’s decision in Combitic Global Caplet Pvt. Ltd., which interpreted Section 142(3) of the CGST Act broadly to cover not just credits but also “any other amount” paid under the erstwhile regime.
On the other hand, the Department contended that Section 142(3) did not entitle refund where such a right did not exist under the pre-GST laws and cited contrary rulings, including those of the Jharkhand and Madras High Courts.
The bench of Dr. Suvendu Kumar Pati noted that a consistent view has now emerged in favour of granting cash refunds in such transitional cases.
The Tribunal held that Section 142(3) allows refund of CVD and SAD paid after 1st July 2017, provided unjust enrichment does not apply. It further observed that the phrase “any other amount” in Section 142(3) is wide enough to include such payments, and the doctrine of necessity requires granting relief where transitional anomalies occur.
Accordingly, CESTAT set aside the order of the Commissioner (Appeals) and directed the Department to refund ₹45.54 lakh along with applicable interest to JSW Steel within two months.
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