Transitional cenvat credit under GST requires fresh consideration on merits, with remand direction modified for hearing

Accrued cenvat credit under the erstwhile regime was not in dispute, but its transition into the GST electronic credit ledger required reconsideration under section 142(3) of the CGST Act, 2017. The Court noted that the earlier order had already set aside the rejection and remitted the matter for fresh examination of whether the credit could be carried forward. As the impugned order was only a remand, complete interference was unnecessary. The remand direction was modified so that the authority must consider the assessee's application on the available materials, on merits, and after hearing the assessee.

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Issues: Whether the assessee's application arising out of belated payment of service tax could be considered under the transitional framework of the GST regime and whether the matter required reconsideration by the authority under section 142(3) of the CGST Act, 2017.

Analysis: The assessee's entitlement to cenvat credit under the erstwhile regime was not disputed, but the credit could not be transitioned because GST had come into force. The Court noted that the earlier order had already set aside the rejection and remitted the matter for reconsideration under section 142(3), with a direction to examine whether the accrued credit could be carried forward to the electronic credit ledger. In the appeal, the Court found that the impugned order was only one of remand and that complete interference was unnecessary. It therefore modified the direction to require the authority to consider the assessee's application on the available materials and on merits, after hearing the assessee.

Conclusion: The assessee was entitled to a fresh consideration of its application under section 142(3) of the CGST Act, 2017, and the remand direction was modified accordingly.

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