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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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PJ/Case Laws/2012-13/1224

Whether cash refund is allowable in case duty paid under protest and Closing down of factory?
 
 
Case:-Lavkush Textiles Vs Commissioner of Central Excise, Jaipur    
 
Citation:- 2012(282) E.L.T. 545 (Tri. – Del.)
 
Issue:- Whether cash refund is allowable in case duty paid under protest and Closing down of factory?
 
Brief Facts:-The Appellant were engaged in manufacture of ACSR conductor of Aluminum falling under Chapter 76 of the Central Excise Tariff Act, 1985. A Show Cause Notice was issued to the appellants demanding Excise duty of Rs. 204554/- out of which a demand of Rs. 176516/- was confirmed vide order in original No. 105/2005-C.E. dated 13.03.2005. Meanwhile the appellants had debited an amount of Rs. 63001/- under protest on 09.03.2005/- in their RG-23A Part-II register, which was appropriated by the above adjudication order. The appellants filed an appeal against the Order- in-Original before the commissioner who rejected their appeal. The Appellants filed further appeal in the Tribunal and the same was allowed vide Final Order No. 982-983/2005-C.E dated 01.12.2005 [2006 (194) E.L.T 288(Tri.)]. They filled a refund application for refunding the Cenvat credit of Rs. 63001/-  in cash as they had surrendered registration certificate by the time the Tribunal gave the relief. But the adjudicating authority passed an order to the effect that cash refund of such Cenvat credit cannot be given to the Appellant because their factory had been closed. Aggrieved by the order the Appellants filled an Appeal before the Commissioner (A). The Commissioner (A) relied on the judgment of the larger Bench of CESTAT in the case of Gauri Plasticluture P. Ltd. V/s CCe-2006(202) E.L.T 199 and set aside the orders sanctioning the refund in cash and allowed the departmental appeal. Aggrieved by the order of the Commissioner (A), the Appellant have filed this Appeal.
 
Appellant’s Contention:-Appellant argued that he is not able to make use of Cenvat credit if refunded by way of credit in RG 23A Part II in their credit account, it is legally proper that the adjudicating authority granted the refund in cash and he relies on the following decisions:
1)    CCE vs. Koclzar Sung-up Acrylic Ltd.-2010(259)E.L.T 713
2)    Raymond Ltd. vs. CCE-2011(274)E.L.T 513
3)    CCE vs. Birla Textiles Mills -2011(21)S.T.R 340
 
Respondent’s Contention:-    The Respondent argued that the Appellants after deb­iting the amount of Rs. 63001/- in the credit account, they have not paid at any point of time any amount in cash or PLA and they were not entitled for refund of Cenvat credit in cash. The Respondent further submit that the Cenvat Credit Scheme no­where envisaged refund of excise duty on inputs used in the manufacture of fin­ished products through a scheme of cash refund except in the case of final prod­ucts exported and In this case, the accumulation of credit was not on account of ex­port of the goods and in such cases, the scheme does not envisage refund of credit in cash. This is the essence of the decision of the Tribunal in Gauri Plasticul­ture (supra). Therefore, the impugned order is proper and maintainable.
 
Reasoning of Judgment:- Tribunal held that the Cenvat Credit Scheme is not for granting refund of excise duty paid on inputs used in the manufacture of excisable goods. The scheme is for allowing utilization of duty paid on inputs for discharging duty liability on final products manufactured using such inputs. If the final products is not dutiable or if the duty incidence on final product is lower than that on the inputs, there is no provision in the scheme to give cash refund of credit accumulated. After accumulating credit, if the fac­tory is closed down the position cannot change. There are a few cases where Tri­bunal had ordered cash refund of Cenvat credit in the case of assessees, who had closed down their factory. In a few of those cases the facts of the case were not examined in detail. In a few other cases cash refunds arose in situations where the assessee was compelled to make a deposit in a disputed case out of Cenvat credit Account and after such debit they had to pay excise duty on their final products using cash on the subsequent clearance and the situation was that if such debit in Cenvat credit account was not forced on the assessee they would not have been required to make such deposit through cash. After making pay­ments through PLA they became eligible for refund of Cenvat credit by winning appeal proceedings. By that time the factory was closed and granting refund by credit in their Cenvat credit account would have been of no use to them and would not have compensated for the payment they were forced to make in PLA. In such situation it is proper that such refund on account of relief in appeal is granted by way of cash refund of Cenvat credit. Such orders passed in such situation have been canvassed before the Assistant Commissioner to get cash re­fund of Cenvat credit in this case also. But the Commissioner has properly analysed the facts with reference to the decision of the Larger Bench of the Tribunal in Gauri Plasticulture Pvt. Ltd. and held that such refund in cash is not warranted in the facts of this case.
 
Decision:- Appeal Rejected.
 
Comment:- As clearly said that the refund of cash was allowed to assessee in such cases because if the credit is allowed then it will be of no use for the manufacturer as the factory has closed down. But now the larger bench as well as this decision has come with the conclusion that the refund will be allowed only in those condition where the deposit in credit has resulted in cash payment by manufacturer on his clearance. Otherwise, the refund of such credit will not be allowed. A very logical reasoning given in this case.
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