2025(04)LCX0093

Aurobindo Pharma Ltd.

Versus

Commissioner of Customs

Customs Appeal No. 30340 of 2024 decided on 21-04-2025

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD

REGIONAL BENCH - COURT NO. – I

Customs Appeal No. 30340 of 2024

(Arising out of Order-in-Appeal No.HYD-CUS-000-APP1-156-23-24 dt.28.12.2023 passed by Commissioner of Customs & Central Tax (Appeals-I), Hyderabad)

M/s Aurobindo Pharma Ltd                     ..         APPELLANT
Sy No.341/Part Unit-12, Bachupally,
Quthbullapur Mandal, Telangana – 500 038

VERSUS

Commissioner of Customs                     ..         RESPONDENT
Hyderabad - Customs
Kendriya Shulk Bhavan, LB Stadium Road,
Basheerbagh, Hyderabad – 500 004

and

Customs Appeal No. 30341 of 2024

(Arising out of Order-in-Appeal No.HYD-CUS-000-APP1-156-23-24 dt.28.12.2023 passed by Commissioner of Customs & Central Tax (Appeals-I), Hyderabad)

M/s Aurobindo Pharma Ltd                         ..     APPELLANT
Sy No.341/Part Unit-12, Bachupally,
Quthbullapur Mandal, Telangana – 500 038

VERSUS

Commissioner of Customs                     ..         RESPONDENT
Hyderabad - Customs
Kendriya Shulk Bhavan, LB Stadium Road,
Basheerbagh, Hyderabad – 500 004

APPEARANCE:-

Shri D.V. Subba Rao, Advocate for the Appellant.
Shri K. Sreenivasa Reddy & Shri B. Sangameshwar Rao, ARs for the Respondent.

CORAM: HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)

FINAL ORDER NO. A/30126-30127/2025

Date of Hearing:04.02.2025
Date of Decision:21.04.2025

    M/s Aurobindo Pharma Ltd (hereinafter referred to as the appellant) are in appeals against Order-in-Appeal dt.28.12.2023 (impugned order), wherein the Commissioner (Appeals) upheld the OIOs and dismissed the appeals filed by the appellant.

2. The brief facts of the case in the first OIO are that the appellant had initially imported Saccharin Sodium Powder (Syncal S) on payment of import duties. The department pointed out that in terms of Notification No.02/2019-Customs (CVD) dt.30.08.2019, Saccharin in all its forms originating in or exported from People’s Republic of China & imported into India is subject to CVD @ 20%, which was not considered while paying aggregate duties of customs. Thereafter, the appellant had paid CVD @ 20% and consequential differential IGST amounting to Rs.12,63,938/- was also paid vide manual TR-6 challan. Thereafter, the appellant has filed refund claim dt.18.06.2022 seeking refund of IGST paid manually vide 2 challans on the grounds that there is no provision to take credit of IGST paid as TR6 challan is not a specified document under Rule 36 of CGST Rules. A SCN cum Refund Rejection Notice dt.20.09.2022 was issued to the appellant on the ground that there is no provision under Customs law for sanction of such refund/ allowing credit of IGST paid on short payment of CVD for the reason that TR6 challan is not specified document in GST/IGST law to avail credit. After due process of law, the Original Adjudicating Authority adjudicated the SCN and passed the OIO rejecting the claim for refund of Rs.12,63,936/-. In the second OIO, the facts are that the appellants had imported certain goods without payment of Customs duty under procurement certificates issued under Notification No.52/2003-Cus dt.31.03.2003, as amended. Subsequently, they cleared the imported goods into DTA on payment of duties in terms of the said notification. Thereafter, they have filed refund claim dt.08.02.2022 for refund of IGST amounts paid vide manual challans totalling to Rs.1,57,223/-, on the ground that IGST paid on manual challan cannot be availed as input tax credit. Aggrieved by the OIOs, the appellants have filed appeals before Commissioner (Appeals), on the ground that the original adjudicating authorities have denied substantial benefit of refund on technicalities ignoring the constitutional provisions. The Commissioner (Appeals) rejected the appeals filed by the appellants on the ground that there are no statutory provisions to grant refund claimed by appellant and upheld the OIOs passed by the original authorities. Aggrieved by the same, the appellants have filed the present appeals before the Tribunal.

3. Learned Counsel for the appellant submits that the impugned order is not a speaking order and is liable to be set aside on this ground alone. The Adjudicating Authority has erred in placing technicalities over substantive benefit of refund. Having held that there is no proposition that indirect taxes are meant to be passed on as held by Hon’ble High Court of Andhra Pradesh in the case of CCE, Hyderabad-III Vs M/s Grey Gold Cement’s [2014 (34) STR 809 (AP)], the Adjudicating Authority ought to have seen that denial of refund results in IGST paid, which becomes a tax on business. Relying on the decision of this Tribunal in the appellant’s own case vide Final Order No. A/30036-30047/2024 dt.18.01.2024, this Tribunal, following the Larger Bench decision on the issue relating to refund of IGST paid vide manual TR6 challan in GST regime, granted the cash refund under section 142(3) for CVD and SAD, which is equally applicable to IGST on the ground that the importer is eligible to take the credit on such duties/taxes. Accordingly, he prays for setting aside the impugned order and allowing the appeal.

4. Learned AR for the department reiterated the findings of the Adjudicating Authority and submits that the issue in the present case had come up before the Chennai Bench of this Tribunal, wherein in the appellant’s own case vide Final Order No. A/40158-40177/2022 dt.06.05.2022, the Tribunal held that appellant is not eligible to claim refund under section 142(3) of the CGST Act, 2017. He further submits that in the case of Servo Packaging Ltd Vs CGST & CE, Puducherry [2020 (373) ELT 550 (Tri-Chennai)], the Chennai Bench of this Tribunal held that if any amount on account of CVD and SAD is paid on account of non-fulfilment of export obligation, the same cannot be claimed as refund.

5. He further submits that the issue is no longer res integra as this Bench as well as other Benches have been holding that if the refund of credit is not admissible in cash under the existing law then section 142, per se, would not make them entitled for refund in cash. He relied on the following cases to support this contention:-

a) M/s Rungta Mines Ltd Vs CCE, Bistupur, Jamshedpur [2022-TIOL-252- HC-Jharkhand-GST]

b) M/s CAD Vision Engineers Pvt Ltd Vs CCT, Hyderabad [Final Order – A/30289/2024 dt.30.04.2024]

c) M/s Cyient Ltd Vs CCT, Rangareddy-GST [Final Order – A/30291/2024 dt.31.07.2024]

d) M/s JSW Cement Ltd Vs CCT, Tirupati-GST [Final Order - A/30345/2024 dt.31.07.2024]

e) Saera Electric Auto Pvt Ltd Vs CCE & ST, Gurgaon-I [2020 (372) ELT 452 (Tri-Chand.)]

f) M/s Mahaveer Metal Manufacturing Co. Vs CCE & CGST, Rajasthan [Final Order – 50591/2023 dt.03.05.2023]

g) M/s Rani Plastic Pipe Industries [2020 (6) TMI 356 – CESTAT Hyd]

h) M/s NACL Industries Ltd Vs CCT, Visakhapatnam [Final Order – A/30373/2024 dt.04.09.2024]

6. He further relies on the following judgments wherein it was categorically held that accrual of input credit is not a vested right rather it is a form of concession:-

a) M/s Nelco Ltd Vs UOI [2020 (36) GSTL 24 (Bom.)]

b) M/s TVS Motor Co. Ltd Vs The State of Tamil Nadu & Ors [2018 (10) TMI 881 (SC)]

c) ALD Automotive Pvt Ltd Vs CTO [2018-TIOL-385-SC-VAT]

7. He further submits that it is clear that merely because the appellants have paid the duty, they cannot be entitled to take credit on the ground that it is their vested rights. He prays that considering the above submissions, the appeals filed by the appellants may be rejected.

8. Heard learned Advocate for the Appellant, Shri D.V. Subba Rao, and learned ARs for the Revenue, Shri K. Sreenivasa Reddy & Shri B. Sangameshwar Rao, and perused the records.

9. I find that in both the appeals, the appellants are seeking refund of IGST paid by them through manual TR6 Challans under the provisions of section 27(1)(a) of the Customs Act, 1962, on the ground that there is no provision to take credit of IGST paid manually through TR6 challans, as TR6 challan is not a specified document under Rule 36 of CGST Rules.

10. On appeals, the Adjudicating Authority and the Appellate Authority have categorically held as under :

a) That there is no provision under Customs Act 1962, which covers such cases; that refund of duties paid in excess can only be claimed under Section 27;

b) That ITC of IGST paid against import of goods is governed by the GST laws and therefore, Customs Officers are not the proper officers to entertain such refund claims;

c) That refund of IGST by Customs Officers in respect of export consignments alone is expressly provided for in Rule 96 of the CGST Rules, 2017, which is not the case here;

d) That the payment of the IGST is not under protest and the said assessment is not disputed by the appellants and hence the assessment is finalised;

e) That even if the goods were cleared on self- assessment, such selfassessment can be revised in accordance with law only by taking recourse to the appropriate proceedings, as held by the Hon'ble Supreme Court in the case of M/s ITC Limited Vs C.C.E., Kolkata-IV [2019 (368) ELT 216 (SC)], where the Hon'ble Supreme Court, vide para 47, held as follows:

"47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self- assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and re-assess the duty for making refund and in case any person is aggrieved by any order which would include self- assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act."

11. I note that this very issue had come up before the Coordinate Bench of this Tribunal at Chennai in the appellant's own case, wherein the Bench, vide Final Order No. A/40158- 40177/2022 dated 06.05.2022, inter alia, held that the appellant is not eligible to claim refund under Section 142(3) of the CGST Act, 2017. Similar decision was also given by Chennai Bench in the case of Servo Packaging Ltd. Vs CGST & CE, Puducherry [2020 (373) ELT 550 (Tri-Chennai)). In other words, in the above cases, it was held that if any amount in respect of CVD and SAD is paid on account of nonfulfilment of export obligation, the same cannot be claimed as refund under Section 142(3) of the CGST Act, 2017.

12. I further find that this issue is no longer res integra as this Bench in the case of M/s CAD Vision Engineers Pvt Ltd Vs CCT, Hyderabad [Final Order – A/30289/2024 dt.30.04.2024], inter alia, held that if the refund of credit is not admissible in cash under the existing law then section 142, per se, would not make them entitled for refund in cash. Thus, it is clear that merely because the appellants had paid the duty, it is not a vested right that they would be entitled for taking the credit.

13. Learned Counsel for the appellant argued that the appellants were not claiming refund by questioning vires of any provision of law, which put any condition on availment of any benefit. They have no grievance against any provision of law. The IGST law has granted a benefit of Input Tax Credit of 'integrated Tax' paid on imported goods, which can be claimed based on ‘document of assessment'. Though the appellants have no grievance against this requirement, they submit that such a document should be given by the Customs Department. The customs website was not designed to transact the work under Sec 28(1)(b), (2) and (3) of the Customs Act. Accordingly, he submits that online communication did not happen and also, no document of assessment in physical form for differential duty paid by the appellants was communicated to the appellants. The lacuna in communication of documents between department and the importers either online or offline is the cause of appellants grievance. The Hon'ble Supreme Court in the case of UOI Vs COSMO Films Ltd [2023 (72) GSTL 417 (SC)] has taken note of this lacuna and thereby, issued directions to CBIC to take corrective measures. CBIC in its Circular No.16/2023-Cus dt.07.06.2023, prescribed the procedure for payments to be made under Sec 28(1)(b), which has only prospective impact. Therefore, no any benefit to appellants by this circular.

14. Learned AR, in this regard, submits that this ground of lacuna in communication of documents has neither been taken by the appellant before the original Adjudicating Authority nor before the first Appellate Authority and the same is not part of the prayer or the Grounds of Appeals filed before the Tribunal. Hence this new ground cannot be entertained at this stage.

15. In view of my findings and discussion supra, I find no merit in the appeals filed by the appellants and therefore, the appeals are liable to be dismissed.

16. Accordingly, the appeals are dismissed.

(Pronounced in Open Court on 21.04.2025)

(ANGAD PRASAD)
MEMBER (JUDICIAL)