2019 (5) TMI 1810 - Commissioner - GST

Appeal dismissed for tax refund request due to Central Excise Credit discrepancy.

The appeal against tax orders under the APGST Act, 2017 disputing the levy of tax was dismissed. The pharmaceutical company sought a refund under CGST, ... Refund claim on account of excess Cenvat credit - Adjudicating Authority has rejected a refund claim of ₹ 3,06,785/- by restricting the input under CGST Act, 2017 for the month of November, 2017 - HELD THAT:- To ascertain any rationality in the contention of the appellant, the inspecting authority has been asked to submit Para-wise remarks against the grounds of the appellant and the AA has submitted para-wise remarks by strongly reiterating the findings as in the assessment order - The A.A also remarked that any excess credit available under Central Excise shall be claimed through Tran-01 only, but the appellant attempted to claim as a refund of excess CENVAT credit. The A.A observed that such excess credit of any existing law pertaining to the period before appointed day i.e. 1-7-2017 shall be disposed off in accordance with the provisions of existing law i.e. Central Excise Act & Rules. These remarks of A.A strongly advocating that claim of excess CENVAT credit pertaining to Central Excise Act cannot be allowed as refund under GST Act. In view of the discrete and relevant instructions to the present dispute, contemplating for not sanctioning refund of excess Cenvat credit during GST period. Hence, it is held that the refund rejection orders of A.A are legally sustainable and in tune with the provisions of CGST Act. Appeal dismissed. Issues:Appeal against tax orders under APGST Act, 2017 disputing levy of tax.Analysis:The appeal was filed by a pharmaceutical company against the tax orders passed by the Assistant Commissioner (ST) for the tax period of November 2017. The company claimed a refund of Rs. 46,76,158 under CGST, out of which Rs. 3,06,785 was rejected by the Assessing Authority (A.A.) as it pertained to Central Excise Credit and not unutilized ITC under GST. The A.A. restricted the amount under CGST over a period of four months, leading to the rejection of the refund claim. The appellant disputed this rejection and sought the refund amount. The A.A. rejected the appeal as it was not filed electronically through the GST portal. The appellant argued that the excess Cenvat credit was disclosed as part of the refund under CGST Act, 2017, based on orders received during the GST period. The A.A. maintained that excess credit under Central Excise should be claimed through Tran-01 only and not as a refund under GST Act.Issues for adjudication:1. Dependability and sustainability of the appellant's contentions against the refund rejection orders by the A.A. under the GST Act.2. Compliance of the refund claim rejection by the A.A. with the provisions of the Act, Rules, and government instructions.Analysis:The A.A. rejected the refund claim based on the discrepancy in the claim related to Central Excise Credit and the provisions of the CGST Act. The A.A. emphasized that any excess credit under Central Excise should be claimed through Tran-01 and not as a refund under the GST Act. The Circular No. 37/11/2018-GST issued by the Central Board of Excise and Customs clarified that refunds of tax paid under existing laws should be disposed of in accordance with the provisions of the existing law. It explicitly stated that no refund of any amount of CENVAT credit should be granted under the GST Act. This instruction clearly indicated that excess credit under the Central Excise Act cannot be claimed as a refund under the CGST Act, making the A.A.'s rejection of the refund legally sustainable. Consequently, the appeal was dismissed, and the tax levied was confirmed.