2024-VIL-1078-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Refund of CENVAT credit reversed in excess - appellants had excess CENVAT credit which they had provisionally reversed under Rule 6(3A) of the CENVAT Credit Rules, 2004 during April-June 2017 - After the end of the financial year, it was found that the quantum of provisional reversal was in excess of the actual reversal warranted - appellants filed a refund claim for the excess CENVAT credit - Whether the appellants are eligible for refund of the excess CENVAT credit in cash under Section 142(3) of the CGST Act, 2017, read with Section 11B of the Central Excise Act, 1944 – HELD – the Section 142(3) of the CGST Act specifically provides that every claim for refund of CENVAT credit, duty, tax, interest or any other amount paid under the existing law shall be disposed of in accordance with the provisions of the existing law, and any amount eventually accruing to the claimant shall be paid in cash, notwithstanding anything to the contrary contained in the existing law, except the provisions of sub-section (2) of Section 11B of the Central Excise Act, 1944 - the objective of the CENVAT credit scheme was to eliminate the cascading effect of taxes and enable seamless flow of credit, and that denying cash refund of excess CENVAT credit would render the phrase "CENVAT credit" in Section 142(3) of the CGST Act otiose – further, the recent judgment of the Bombay High Court in Combitic Global Caplet Pvt. Ltd. held that Section 142(3) of the CGST Act mandates that any amount accruing to the claimant shall be paid in cash. Accordingly, the appellants are entitled to refund of the excess CENVAT credit in cash - the impugned order is set aside and appeal is allowed
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