Gujarat HC allows Rebate of Excise Duty to Petitioner in Cash instead of Cenvat Credit in post GST regime

Last updated: 27 March 2020

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The Gujarat High Court has ruled that Thermax Ltd. is entitled to receive a rebate of excise duty paid on exported goods in cash, rather than as CENVAT credit. The court found that while the rebate claim was initially rejected, the duty paid was considered a voluntary deposit. Crucially, under Section 142(3) of the CGST Act, any amounts due post-GST should be paid in cash, making CENVAT credit redundant for such claims.

Court :
Gujarat HC

Brief :
Thermax Ltd. (“Petitioner” )is engaged in the manufacture of Boilers, Heaters, Heat Pumps and Pollution control equipment for industrial use and all these equipment’s are capital goods falling under Chapter 84of the Central Excise Tariff Act, 1985 (“CETA”). The Petitioner has major manufacturing set up at Pune, Maharashtra and Baroda in Gujarat. The Petitioner availed credit on the inputs, capital goods and input services used in the manufacturing of finished goods which are chargeable to excise duty. It is the case of the Petitioner that one of the customers M/s. Ansaldo Caldale SpA (“Siemens Projects”) had placed order on the Petitioner for supply of Boiler at Jeddah, Saudi Arabia. Therefore, with a view to carry out complete assemble, the Petitioner signed a lease agreement with Special Economic Zone on November 3rd, 2007 and the Petitioner therefore was temporarily given Survey No.169 at village: Dhrub for assembling the boilers. The Petitioner exported the boilers on payment of applicable excise duty. The Petitioner filed a rebate claim under Rule 18 of the Central Excise Rules, 2002 (“Central Excise Rules”) on June 16th, 2008. Thereafter, after a period of three months i.e. on September 12th, 2008, show cause notice was issued proposing to deny rebate claimed by the Petitioner. On March 5th, 2009, the Petitioner filed reply to the show cause notice and thereafter, the Petitioner filed written submissions. The Respondent rejected the rebate claim filed by the Petitioner on July 20th, 2011. Therefore, the Petitioner has challenged the same before the Commissioner of Central Excise (Appeals), Rajkot, who in turn rejected the appeal on November 22nd, 2011 by upholding the order in original dated July 20th, 2011.Being aggrieved with the said order, the Petitioner filed Revision Application before the Revisionary Authority on December 27th, 2017, which had rejected the Revision Application of the Petitioner.

Citation :

Daily Limit Reached