Pranav B Prem

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has directed refund of ₹73,025 towards Countervailing Duty (CVD) and Special Additional Duty (SAD), holding that refund of duties pertaining to the pre-GST period cannot be denied merely because the duties were paid after the introduction of GST. The Tribunal clarified that such refunds remain permissible under Section 11B of the Central Excise Act, 1944 read with Section 142(3) of the CGST Act, 2017.

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The appeal was filed by Aculife Healthcare Pvt. Ltd., which had paid CVD and SAD for the period prior to 1 July 2017, but the actual payments were made after GST came into force. The refund claim was rejected on the ground that, at the time of payment, there was no provision to avail Cenvat credit under the post-GST framework, and the department took the view that refund cannot be granted for duties considered “non-cenvatable” at the time of payment. The Commissioner (Appeals) affirmed this rejection, prompting the assessee to approach the Tribunal.

The matter came before Judicial Member Somesh Arora, who noted that the same issue had already been decided in favour of the assessee by a Division Bench of the Tribunal in CCE & ST, Ahmedabad-II v. Aculife Healthcare Pvt. Ltd., Final Order No. 10978/2024. In that ruling, the Tribunal held that when duties paid pertain to the pre-GST regime, the right to Cenvat credit exists under the then-prevailing law, and Section 142(3) of the CGST Act was enacted specifically to protect refunds where credit could not be availed because of the GST transition.

The Tribunal highlighted that the department’s reliance on the decision in Sarvo Packaging Ltd. was misplaced, as subsequent judgments — including Sri Chakra Polyplast India Pvt. Ltd. — had expressly taken a contrary view, and the legal principle of “later is better” applies where conflicting judgments exist. The Tribunal reiterated that duties which were cenvatable under the pre-GST law cannot be treated as non-refundable solely because the payment happened after 1 July 2017.

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Applying the settled legal position to the facts of the present case, the Tribunal allowed the refund claim of ₹73,025. It concluded that the Commissioner (Appeals) erred in denying the refund and that the assessee was legally entitled to the amount under Section 11B of the Central Excise Act read with Section 142(3) of the CGST Act. The Tribunal set aside the impugned order and allowed the appeal in full.

Appearance

Counsel For  Appellant: P.P. Jadeja, Consultant

Counsel For Respondent: P. Ganesan, Superintendent (AR)

Cause Title: Aculife Healthcare Pvt Ltd. Versus C.C.E. – Ahmedabad-II

Case No: Excise Appeal No. 10461 of 2020

Coram: Judicial Member Somesh Arora