Wrongful Reversal of Cenvat Credit on Re-exported Goods: CESTAT allows Refund or Re-credit Option [Read Order]
The tribunal ruled that the appellant was entitled to either re-credit the debited amount or receive a refund under GST provisions if re-credit was not feasible
![Wrongful Reversal of Cenvat Credit on Re-exported Goods: CESTAT allows Refund or Re-credit Option [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/CESTAT-ruling-Cenvat-Credit-Export-tax-credit-taxscan.jpg "Wrongful Reversal of Cenvat Credit on Re-exported Goods: CESTAT allows Refund or Re-credit Option [Read Order]")
The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) allowed the assessee the option of a refund or re-credit for wrongful reversal of Cenvat Credit on re-exported goods Transpek Industry Ltd,appellant-assessee, imported goods that were later re-exported with the department's permission. Their accountant mistakenly reversed the Cenvat Credit of CVD and SAD paid...
The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) allowed the assessee the option of a refund or re-credit for wrongful reversal of Cenvat Credit on re-exported goods
Transpek Industry Ltd,appellant-assessee, imported goods that were later re-exported with the department's permission. Their accountant mistakenly reversed the Cenvat Credit of CVD and SAD paid at the time of import. They later filed for a refund based on Board Circulars dated December 31, 1996, and August 29, 2000. However, the department denied the refund, stating that since they had reversed the credit, they were no longer eligible for it.
The assessee was aggrieved by the denial of the duty refund. They cited a similar case where credit was allowed and argued that they should either be allowed to re-credit the wrongly debited amount or receive a refund.
A single member bench comprising Somesh Arora (Judicial Member) reviewed the Board Circulars and relevant decisions. It noted that the circulars allowed re-export of inputs under bond without reversing the credit. Referring to a similar case, Zydex Industries vs. Commissioner of C. Ex., Vadodara, it held that re-exported goods were eligible for a refund or re-credit.
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The tribunal found the Supreme Court's decision in M/s. KCP Ltd vs. CC Chennai inapplicable, as the facts were different. It ruled that the assessee was either entitled to re-credit the debited amount or receive a refund under GST provisions if re-credit was not possible.
The appellate tribunal sent the matter back, granting relief to the assessee and directed the department to decide, with the assessee's consent, whether they preferred re-credit or a refund.
In short,the appeal was disposed of.
To Read the full text of the Order CLICK HERE
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