Madras High Court judge saravanan allows Benefit of CENVAT Refund, as Credit of Duty was not able to use after introduction of GST
Madras High Court allows Benefit of CENVAT Refund, as Credit of Duty was not able to use after introduction of GST [Read Order]
The Madras High Court allowed the benefit of Cenvat refund to the taxpayer as the credit of duty was not able to use after the introduction of the Goods and Services Tax ( GST).
The petitioner, BNP Paribas Global Securities Operations Private Limited, urged that the total value of Input Tax credit which was un-utilized was Rs.6,62,67,726/- which was not taken into GST Account by following the transfer application, and therefore the petitioner was entitled to refund the claim of the amount even though the petitioner could not debit the duty in the ST-3 return in view of the change in the law.
The petitioner submits that Rule 2(h) of Notification No.27/2012-CE(NT) dated June 18, 2012 contemplates the amount that is claimed as refund under Rule 5 of the said Rules shall be debited from the CENVAT credit account at the time of making the refund claim.
He further submitted that these refund claims have been filed in time but after the GST was implemented. For the exports prior to implementation of GST, refund claims were filed within the period of one year from the date of exports in terms of Rule 5 of CENVAT Credit Rules, 2004 read with the above notification.
He further submits that the petitioner has not transferred the proportionate amount to Rs.6,62,67,726/- into GST and therefore the reasonings adopted for allowing the refund claim for a sum of Rs.1,65,14,132/- vide Order-in- Original dated October 25, 2018 has to be applied mutatis mutandis. The two refund claims were to be allowed on similar lines.
The respondent in its counter has stated that the petitioner had time upto September 15, 2017 to file a revised return and debited the amount which they did not and therefore the refund claims for the period commencing from October 2016 to December 2016 and January 2017 to March 2017 cannot be allowed. The refund claims cannot be allowed on the basis of the refund claim allowed for the period April 2017 to June 2017 filed on 30.10.2017.
The coram of C.Saravanan while considering the fact that the petitioner has also not been able to utilize the credit of duty under the provisions of GST which came to be effected from July 1, 2017 and held that legitimate export incentives cannot be denied to the petitioner.
The court found no merits in denying the benefit of refund claim filed by the petitioner under Rule 5 of the CENVAT Rules, 2004 and directed the respondent authority to refund the amount to the petitioner within a period of six weeks.