Order Date – 06 February 2024

Parties: M/s. Krah Woory India Pvt. Ltd. Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. Krah Woory India Pvt. Ltd., imported capital goods under the EPCG scheme and were not fulfill the export obligation under the said Notification. Therefore, they paid import duty including CVD and SAD on the said imports and claimed refund of the CVD and SAD refund of CENVAT Credit as they could not be taken as credit in the GST regime.
• The refund sanctioning authority rejected the refund claim on the ground that the import conditions were not fulfilled. Further on appeal, Commissioner (Appeals upheld the order passed by the refund sanctioning authority and rejected the refund on the ground that refund is available to only goods used as inputs and not as capital goods.

Issue –

• Whether the appellant is eligible to claim refund of CVD and SAD refund of CENVAT Credit?

Order –

• The Tribunal observed that CENVAT Credit Rules 2004 includes capital goods in the definition of ‘inputs’. The reason and legal provisions why the learned Commissioner (Appeals) came to the conclusion that duty paid on excisable goods which are inputs alone are eligible and duty paid on capital goods cannot be refunded, is not discussed and is hence not clear.
• It is also noted that the Original Authority had not disputed the eligibility to CENVAT credit for the capital goods under CCR,2004. The impugned order is hence based on a new ground. A rounded examination of the issue has not been done. The reasons given by the Original Authority and the judgment of M/s Servo Packaging ltd do not form a part of the impugned order into which the OIO has merged.
• Hence while brevity is the ingredient of a good judgment the greatest hallmark is clarity and the citing of legal provisions which led to the decision. No legal grounds as found in the impugned order to have rejected the claim for refund.
• The appeals are disposed of accordingly.