Transitional refund claims under GST should be paid in cash, not re-credited to the cenvat account.

Transitional refund claims pending in appeal when GST commenced were to be dealt with under the GST transition framework, and the stated position is that such amounts should be refunded in cash rather than re-credited to the cenvat account. The analysis turns on the treatment of pre-GST credit claims decided after the new regime came into force, with the operative effect being that re-credit was not the correct mode of refund. On that basis, the direction for re-credit was set aside and cash refund was directed.

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Issues: Whether refund of cenvat credit, when the appeal had been filed in the pre-GST regime but was decided after the coming into force of GST, was required to be paid in cash instead of being re-credited to the cenvat credit account.

Analysis: The dispute turned on the transitional treatment of pending refund claims after GST came into force. The appellant relied on the statutory transition provision to contend that credit pending in appeal and allowed after GST could not be merely re-credited, and that refund had to be issued in cash.

Conclusion: The direction for re-credit was set aside and the authorities were directed to grant the refund in cash. The appeal succeeded to that extent.

Final Conclusion: The order on the mode of refund was altered in favour of the appellant, with cash refund directed under the GST transition framework.

Ratio Decidendi: Transitional refund claims decided after the commencement of GST, where the credit was pending in appeal from the earlier regime, are to be refunded in cash rather than by re-crediting the cenvat account.

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