Transitional Cenvat credit upheld for pre-GST closing balance, and jurisdictional objection rejected.

The Tribunal held that the Commissioner (Appeals) had jurisdiction because the dispute concerned the June 2017 closing Cenvat credit balance reflected in the excise return, not a matter arising purely under the CGST regime. It further held that transitional credit was allowable for closing Cenvat credit carried forward from the pre-GST period, and the assessee's corrected return and explanation of clerical error were not rebutted by departmental evidence. In the absence of proof that the lower revised balance was correct, denial of transitional credit was unsustainable and the demand for reversal could not survive.

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Issues: (i) whether the Commissioner (Appeals) lacked jurisdiction to decide the appeal on the footing that the dispute arose under the Central Goods and Services Tax regime; (ii) whether the assessee was entitled to carry forward and claim transitional credit of the closing Cenvat credit balance shown in the ER-1 return.

Issue (i): whether the Commissioner (Appeals) lacked jurisdiction to decide the appeal on the footing that the dispute arose under the Central Goods and Services Tax regime.

Analysis: The order-in-appeal itself disclosed that it was passed by the Commissioner (Appeals) for both Central Excise and CGST matters. The disputed amount related to the June 2017 closing balance reflected in the excise return, a period when the Central Excise regime was still applicable for that credit balance. The Tribunal held that the departmental objection proceeded on an incorrect characterisation of the dispute as one arising purely under the CGST regime.

Conclusion: The jurisdictional objection was rejected and the order of the Commissioner (Appeals) was not found to be without competence.

Issue (ii): whether the assessee was entitled to carry forward and claim transitional credit of the closing Cenvat credit balance shown in the ER-1 return.

Analysis: Transitional credit was considered permissible for closing Cenvat credit lying prior to the commencement of GST under the transitional credit provision. The assessee had informed the department of the clerical mistake in the revised return, and the department did not produce evidence to show that the lower figure in the revised return was the correct balance. In the absence of rebuttal and in view of the timing of the return vis-a -vis the appointed date, the denial of credit was held unsustainable.

Conclusion: The assessee was held entitled to the credit and the demand for reversal could not survive.

Final Conclusion: The departmental challenge failed, the assessee's entitlement to transitional credit was upheld, and the impugned order of disallowance was set aside.

Ratio Decidendi: Closing Cenvat credit pertaining to the pre-GST period is eligible for transitional credit under the GST transition provisions, and a denial cannot be sustained without evidence disproving the assessee's stated closing balance.

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