M/S Green Valliey Industries LTD. vs. Union Of INDIA And 3 Ors.

Held

The Court held that the petitioner was entitled to the cenvat credit of Rs.6,55,99,154/-, following the precedent established in *Amrit Cement Limited*, as the revenue's arguments were previously repelled. Regarding the Rs.30,73,908/- claimed through TRAN-1, the Court found it impermissible. The exemption notification No.20/2007 required the assessee to exhaust the entire available credit before adjusting duty liability by cash and seeking a refund only for the cash payment. By not including this amount in its refund claim for June 2017, the petitioner was deemed to have abandoned such credit, and it could not be carried forward in TRAN-1. Equitable principles did not apply to override the conditions of an exemption provision. Therefore, the appellate order rejecting this part of the claim was upheld. However, the Court set aside the penalty imposed by the appellate order in its entirety. While the revenue argued for penalty under Section 74 for the Rs.30,73,908/- claim, the Court found no attempt to defraud, mislead, or suppress material facts, and no failure to pay an amount in the strict sense, making it an inappropriate case for penalty. Interest imposed on this sum by the appellate order was not interfered with.

Facts

The petitioner, M/s Green Valliey Industries Ltd., challenged an appellate order dated July 14, 2021, which dealt with a show-cause notice dated July 31, 2019. The dispute concerned the transitional period from the previous sales tax regime to GST, specifically regarding cenvat credit claims. The total disputed amount was Rs.6,86,73,062/-, comprising Rs.6,55,99,154/- in cenvat credit and Rs.30,73,908/- claimed through TRAN-1. The petitioner relied on a previous High Court judgment in *Amrit Cement Limited*. The revenue argued that the Rs.30,73,908/- claimed via TRAN-1 was impermissible due to an exemption notification and the petitioner's failure to exhaust available credit before claiming a refund.

Key Issues

1. Whether the petitioner is entitled to carry forward the cenvat credit of Rs.6,55,99,154/- in light of Section 140 of the Central Goods and Services Tax Act, 2017 and Rule 117 of the Central Goods and Services Tax Rules, 2017, considering the precedent set in *Amrit Cement Limited*? The petitioner argued for entitlement based on the *Amrit Cement Limited* judgment. The revenue contended that the grounds for resisting this part of the claim were the same as in *Amrit Cement Limited*, where they were repelled. 2. Whether the petitioner is entitled to the credit of Rs.30,73,908/- claimed through TRAN-1, given the conditions of exemption notification No.20/2007 dated April 25, 2007, and Section 140 of the Act? The petitioner argued that this amount was lost due to mistake or oversight and sought discretion, suggesting no fraudulent intent. The revenue argued that this amount was impermissible as the petitioner did not exhaust the entire available credit before claiming a refund, and the appellate order rightly rejected it. 3. Whether the penalty imposed by the Department should be set aside entirely, given that a larger part of the claim was allowed?