2021 (5) TMI 954 - AT - Service Tax

Tribunal grants refund claim for unutilized credits under GST regime

Schlumberger Asia Services Ltd Versus Commissioner of CE & ST, Gurgaon-I

The Tribunal allowed the appeal, granting the appellant the refund claim for unutilized credits of Education Cess, Secondary & Higher Education Cess, ... Refund of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess filed by them lying unutilized in their cenvet credit account - Time Limitation - GST credit or not - HELD THAT:- As the appellant has reversed the said amount in their GST account, in terms of the amendment to Section 140 of the CGST Act, 2017 on 30.08.2018, the said amount shall remain lying unutilized in their cenvat credit account on account of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess as good as on 01.07.2017. Further, as admitted by both the sides that in terms of Section 140 of the Act, the amount of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess cannot be transferred to GST account then it is only a cenvat credit of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess lying unutilized as on 01.07.2017 in their cenvat credit account. Therefore, the contention of the ld. AR that it is a GST credit, is not acceptable when the provision of law is very much clear that the said credit cannot be transferred to GST Regime. Whether the refund claim filed by the appellant is barred by limitation or not? - HELD THAT:- The amendment to Section 140 came after one year of the switching to the GST Regime on 30.08.2018 which is applicable retrospectively. In that circumstances how the appellant could have filed the refund claim within one year from 01.07.2017 till 30.08.2018, when there was no provision of law existed, when amendment itself takes on 30.08.2018, therefore, the relevant date of filing the refund claim shall be 30.08.2018 and within one year of the said date, the refund claim has been filed by the appellant - the refund claim filed by the appellant is not barred by limitation. Whether the decision in the case of M/S BHARAT HEAVY ELECTRICALS LTD. (EXCISE & TAXATION DIVISION) VERSUS COMMISSIONER CENTRAL GOODS SERVICE TAX, CENTRAL EXCISE & CUSTOMS, BHOPAL (MADHYA PRADESH) [2019 (4) TMI 1896 - CESTAT NEW DELHI] can be relied in this case or not? - HELD THAT:- In the case of M/s Bharat Heavy Electricals Ltd, this Tribunal laid down in law That Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess cannot be transferred to GST account and as they were lying unutilized in their cenvat credit account on 30.06.2017, the assesee is entitled to claim the refund thereof. In other words, if the appellant could have filed the refund claim before 30.06.2017 of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess, the same is admissible to the appellant. The appellant is entitled to file the refund claim; accordingly, the impugned order is set aside - refund claim is allowed which is subject to verification of the records - appeal allowed - decided in favor of appellant. Issues:Appeal against denial of refund claim for Education Cess, Secondary & Higher Education Cess, and Krishi Kalyan Cess under GST Regime.Analysis:1. The appellant's refund claim for Education Cess, Secondary & Higher Education Cess, and Krishi Kalyan Cess was denied as per the impugned order due to an amendment in Section 140 of the CGST Act, 2017. The appellant transferred the unutilized cenvat credit to their GST account when the GST Regime came into force on 01.07.2017. Subsequently, an amendment on 30.08.2018 disallowed carrying forward such credits to the GST regime. The appellant reversed the credits and filed a refund claim, which was rejected as time-barred. The issue was whether the refund claim was valid under the circumstances.2. The appellant argued that a similar case precedent allowed the refund claim, citing M/s Bharat Heavy Electricals Ltd vs. Commr. of CGST & Customs. The respondent contended that the appellant should have filed the refund claim within one year from 01.07.2017, as per Section 140 of the CGST Act, 2017. The respondent also argued that the appellant's case differed from the precedent cited.3. The Tribunal found that the appellant had taken the cenvat credit under the CGST Act before the retrospective amendment to Section 140 in 2018. As per the amendment, the credits were not admissible under the GST regime, leading the appellant to reverse the credits and file the refund claim. The Tribunal held that the refund claim was not time-barred, considering the retrospective nature of the amendment.4. Regarding the applicability of the precedent case, the Tribunal noted that the precedent established that Education Cess, Secondary & Higher Education Cess, and Krishi Kalyan Cess could not be transferred to the GST account. The Tribunal held that the appellant was entitled to file the refund claim based on the precedent, setting aside the impugned order and allowing the refund claim, subject to verification.5. In conclusion, the Tribunal allowed the appeal, stating that the appellant was entitled to the refund claim for the unutilized credits of Education Cess, Secondary & Higher Education Cess, and Krishi Kalyan Cess. The decision was based on the interpretation of the law and the applicability of the precedent case.