CESTAT - Reimbursement - CVD - SAD - CGST Law - TAXSCAN

The Delhi Bench of CESTAT observed that when the company has paid CVD and SAD during the GST regime, the same is eligible as a refund under the provisions of Section 142 (3) and (6) of the CGST law.

The appellants, Mithila Drugs Pvt. Ltd, is engaged in the manufacture of drugs such as tinidazole, metronidazole, etc. under Chapter 29 of the Central Excise Tariff Act 1985. The end products produced by the appellant were exported and also cleared for domestic consumption upon payment of the applicable excise duty. .

The tax administration, while defending the denial of refund order, maintained that the appellant had provided no documentary evidence before the contracting authority or before the appeal authority.

Judicial member Mr. Anil Chaudhary found that the subsequent payment of CVD and SAD under the GST regime, for imports made before 30.06.2017 is not contested under the prior authorization regime.

“It is also undisputed that the Appellant paid CVD and SAD in August 2018 as an adjustment after being so reported by the tax authorities. Further, I find that the Court below erred in observing in the impugned order that without producing proper records of paid invoices, etc. in the manufacture of the final dutiable product, reimbursement cannot be granted. and SAD in question is permitted, as the credit is no longer available under the GST scheme, which was however available under the former central excise scheme before 30.06.2017. the Appellant is entitled to a refund under the provisions of Section 142(3) and (6) of the CGST Act,” the bench observed.

“Accordingly, I direct the Jurisdictional Assistant Commissioner to award refunds to the Appellant of the amount of SAD & CVD, as set forth in the Show Cause Notices and also in the Appeal Orders. Such refund will be awarded within 45 days from the date of receipt of the order with interest under Section 11BB of the Central Excise Act The disputed orders are set aside,” the bench concluded.

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