Refund claims under CGST Act appealable to GST Appellate Tribunal, not CESTAT. Larger Bench to decide appealability.

The Tribunal concluded that refund claims under Section 142(3) of the C.G.S.T. Act, 2017 should be disposed of under the C.G.S.T. Act and are appealable to the GST Appellate Tribunal, not the CESTAT. Due to conflicting decisions, the matter was referred to a Larger Bench to determine whether a refund order under Section 142 of the Act is appealable before the Customs, Excise and Service Tax Appellate Tribunal. The Registry was directed to present the issue before the Hon'ble President for the constitution of a Larger Bench.

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Issues Involved:
1. Jurisdiction of CESTAT to decide refund claims under the C.G.S.T. Act, 2017.

Issue-Wise Detailed Analysis:

1. Jurisdiction of CESTAT to Decide Refund Claims Under C.G.S.T. Act, 2017:

Background and Facts:
The appellant's accounts were audited, and an objection was raised regarding the short payment of Service Tax under the reverse charge mechanism for the period from 2015 to June 2017. The appellant paid the Service Tax along with interest following the audit objection and later sought a refund of the Service Tax paid, claiming it was eligible as CENVAT Credit under the CENVAT Credit Rules, 2004. A Show Cause Notice was issued proposing to reject the refund claim on the grounds that the appellant had not substantiated their eligibility to avail the CENVAT Credit and that there was no provision under the existing law to claim a refund of Service Tax paid under the reverse charge mechanism. The refund claim was rejected by the Order-in-Original, which was upheld by the Commissioner of Central Tax (Appeals-II). The appellant then appealed to the Tribunal.

Referral to Larger Bench:
The Single Member Bench referred the matter to the Larger Bench to address the question of law: "Whether the CESTAT, having been constituted under the Customs Act, 1962, can look into and decide refund claims under C.G.S.T. upon the introduction of the Central Goods and Services Tax Act, 2017, which is a self-contained code having its own appellate mechanismsRs."

Arguments by the Appellant:
The appellant argued that as per Section 142(3) of the C.G.S.T. Act, the refund of CENVAT Credit should be dealt with under the existing law, i.e., the Central Excise Act and the Finance Act. Therefore, the order passed under the existing law is appealable before the CESTAT. The appellant cited various judgments where the Tribunal entertained appeals and allowed refunds under similar circumstances, asserting that there was no divergence of views requiring a reference to the Larger Bench.

Arguments by the Revenue:
The Revenue contended that the refund pertained to Service Tax paid belatedly and sought under Section 142(3) of the C.G.S.T. Act, 2017, thus falling under the provisions of the C.G.S.T. Act. Therefore, the appeal does not lie before the CESTAT.

Tribunal's Analysis and Decision:
The Tribunal examined the decision in the case of M/s. United Seamless Tubular Pvt. Ltd., which held that CESTAT has jurisdiction to interpret and apply the provisions of the C.G.S.T. Act only to the extent they modify the provisions of the Central Excise Act and Finance Act, 1994. It was found that there was a clear divergence in decisions, with some cases being decided by the Tribunal under Section 142(3) of the C.G.S.T. Act.

Conclusion:
The Tribunal concluded that the reference made by the Single Member was correct and legal. It opined that the refund claim under Section 142(3) of the C.G.S.T. Act, 2017, should be disposed of under the C.G.S.T. Act, and any order passed under the C.G.S.T. Act is appealable to the GST Appellate Tribunal, not the CESTAT. However, given the conflicting decisions, the Tribunal referred the matter to a Larger Bench to decide the question of law: "Whether a refund order passed under Section 142 of the Central Goods and Services Tax Act, 2017 is appealable before the Customs, Excise and Service Tax Appellate Tribunal or otherwiseRs."

Order:
The Registry was directed to place the matter before the Hon’ble President for constituting a Larger Bench to decide the above question of law.

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