TaxTMI 
TaxTMI 
2023 (12) TMI 1145
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....STAT, having been constituted under the Customs Act, 1962, can look into and decide refund claim under C.G.S.T. upon the introduction the Central Goods and Services Tax Act, 2017, which is a self-contained code having its own appellate mechanisms?" 3. It would be appropriate to first briefly narrate the dispute that had led to the filing of this appeal before the Tribunal. 4. M/s. Bosch Electrical Drive India Private Limited [the appellant] discharged service tax under the provisions of Chapter V of the Finance Act, 1994 [the Finance Act] and availed CENVAT credit of the tax paid under the provisions of the CENVAT Credit Rules, 2004 [the CENVAT Rules]. 5. Pursuant to an audit conducted by the department in November 2017, the appellant was served with an audit objection that it had short paid service tax under reverse charge mechanism on the import of services. The appellant paid an amount of Rs. 39,18,672/- towards service tax with interest under reverse charge for import of services on 08.12.2017. The appellant claims that it was eligible to claim input credit under the CENVAT Rules on the aforesaid amount, but it was disabled from taking such credit as the Central Goods and Se....
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....T Act. 8. The Deputy Commissioner, by order dated 24.04.2019, rejected the refund claim filed by the appellant for the reason that after the implementation of CGST Act on 01.07.2017, the CENVAT Rules ceased to be in force and the claim under section 142(3) of CGST Act cannot be considered to be under the 'existing law' as the service tax was not paid in time but on 08.12.2017 after the CGST Act had come into force. The operative part of the order passed by the Deputy Commissioner is reproduced below: "6.3 The assessee in their refund application claimed the refund of Rs. 39,18,672/- citing that they were eligible to take credit of this amount under the erstwhile law i.e. Rule 4(7) and Rule 9(e) of the Cenvat Credit Rules, 2004 and now after change in taxation system, they are not in position to take the cenvat credit as cenvat scheme is no more and hence requested for cash refund. I find that consequent upon implementation of GST w.e.f. 01.07.2017, the Cenvat Credit Rules, 2004 ceased to be in force with effect from 01.07.2017. The Audit Para was settled by the assessee as they paid the Service Tax liability of Rs. 41,48,834/-(Incl. of Cesses) along with the interest of Rs. 6,49....
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.... periods i.e. 2015-16 onwards could only be treated as tax arrears. Delayed payment on the part of the appellant has resulted in a situation where there is no provision under the rules to be eligible for the credit. For these reasons, the case laws cited by the appellant are not applicable to the present case. Claiming refund on this score has rightly been rejected by the respondent. 10. In fact, Section 142(8) of the CGST Act, 2017 states that where in pursuance of an assessment or adjudication proceedings initiated, whether before, on or after the appointed day under the existing law, any amount of tax, interest fine or penalty becomes recoverable the same shall unless, recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as Input Tax Credit. 11. I am therefore in agreement with the findings of the respondent that in as much as the amount has been paid by them only on 8.12.2017, it is not available as CENVAT Credit after the designated date. Therefore the question of eligibility of the amount as credit and subsequent refund of the same does not arise." (emphasis supplied) 10. It is against the ....
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....under the C.G.S.T. Act only. Therefore, the present claim is not arising out of the existing law and hence, the same cannot be disposed of under the existing law. 14.1 There is a specific provision for refund of CENVAT Credit under the C.G.S.T. Act. The refund of CENVAT Credit is required to be disposed of under the C.G.S.T. Act only and any order passed under the C.G.S.T. Act is appealable before the GST Appellate Tribunal in terms of Section 112(1) of the Act, which is reproduced below: "SECTION 112. Appeals to Appellate Tribunal. - (1) Any person aggrieved by an order passed against him under section 107 or section 108 of this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act may appeal to the Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal." 14.2 From the above appeal provision under the C.G.S.T. Act, it is absolutely clear that any orders passed under the C.G.S.T. Act are appealable to the G.S.T. Appellate Tribunal. No exception was provided for any matter passed under the C.G.S.T. Act for filing appeal....
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....uniform legal position, in the interests of justice, this matter must be decided by a Larger Bench." (emphasis supplied) 15. Shri Raghavan Ramabadran, learned counsel made submissions on behalf of the appellant, while Shri V.S. Jayakumar, learned senior counsel assisted by Shri Mudit Bohara made submissions on behalf of the intervener. Shri M. Ambe, learned authorized representative made submissions on behalf of the department. 16. In the present case, the appellant had deposited the short payment of service tax under the reverse charge mechanism in respect of import of service on 08.12.2017, after the time period prescribed for filing the last ST-3 Return had expired. This amount was, therefore, not reflected in the ST-3 Return. The CGST Act came into force w.e.f. 01.07.2017. The appellant, therefore, could not claim the transition of the input credit under section 140 of the CGST Act. The appellant could not also avail CENVAT credit under the CENVAT Rules as they were no longer in force after the introduction of the CGST Act. 17. It is for this reason that the appellant filed an application under section 142(3) of the CGST Act claiming refund of the amount of CENVAT credit p....
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.... 139 of the CGST Act, which came into force on 22.06.2017, deals with 'migration of existing taxpayers'. Sub-section (1) of section 139 is reproduced below: "139 (1) On and from the appointed day, every person registered under any of the existing laws and having a valid Permanent Account Number shall be issued a certificate of registration on provisional basis, subject to such conditions and in such form and manner as may be prescribed, which unless replaced by a final certificate of registration under sub-section (2), shall be liable to be cancelled if the conditions so prescribed are not complied with." 26. Section 140 of the CGST Act came into force on 01.07.2017. Sub-section (1) of section 140 is reproduced below: "140 (1) A registered person, other than a person opting to pay tax under section 10 shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit of eligible duties carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law within such time and in such manner as may be prescribed: Provided that the registered person shall not be allowed to t....
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....r before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act." 28. Chapter XXI of the CGST Act deals with Miscellaneous matters. Section 173, which is contained in Chapter XXI, deals with amendment of the Finance Act. It came into force on 01.07.2017 and is reproduced below: "173. Amendment of Act 32 of 1994 Save as otherwise provided in this Act, Chapter V of the Finance Act, 1994 shall be omitted." 29. Section 174, which also came into on 01.07.2017, deals with repeal and saving. Sub-section (1) and clause (f) of sub-section (2) are reproduced below: "174. Repeal and Saving (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (1 of 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution),....
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.... by the learned counsel for the appellant, the learned senior counsel for the intervener and the learned authorized representative appearing for the department can now be considered. 32. The submissions advanced by the learned counsel for the appellant are: (i) The refund claims of amount paid under the existing laws have to be considered under section 142(3) of the CGST Act, in accordance with the existing law. The appeal would, therefore, lie before the Tribunal since it relates to refund of CENVAT credit eligible under the existing law, though such refund is enabled and routed through section 142(3) of the CGST Act; (ii) The Tribunal has been constituted under section 129 of the Customs Act, 1962 to hear appeals against the orders of the adjudicating authority. The refund in the present appeal emnates from existing law and, therefore, the Tribunal would have the jurisdiction to decide the eligibility of the refund claimed; (iii) Under section 112 of the CGST Act, appeal can be filed before Goods and Services Tax Appellate Tribunal by any person aggrieved by an order passed against him under section 107 or section 108 of the CGST Act. As the order was passed under section ....
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.... to dispose of the refund claim and the Tribunal would not have the jurisdiction to entertain the appeal. Learned authorized representative also contended that the appellant is not justified in placing reliance upon section 174(2)(e) and section 174(2)(f) of the CGST Act. 35. The submissions advanced by learned counsel for the appellant, the learned senior counsel appearing for the intervener, and the learned authorized representative appearing for the department have been considered. 36. The issue that has been referred to the Larger Bench of the Tribunal is whether a refund order passed under section 142 of the CGST Act is appealable before the Tribunal. 37. Section 142, as noticed above, deals with Miscellaneous Transitional Provisions. Sub-section (3) provides that every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of the existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the p....
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.... passed under section 107 or section 108 of the CGST Act. It is, therefore, clear that against an order passed under sub-section (3) of section 142 of the CGST Act an appeal would not lie before the Appellate Tribunal constituted under the CGST Act. 43. It now needs to be examined whether the Tribunal would have the jurisdiction to entertain an appeal filed against an order passed under sub-section (3) of section 142 of the CGST Act. 44. Under sub-section (3) of section 142 of the CGST Act, the claim for refund of any amount of CENVAT credit has to be disposed of in accordance with the provisions of the existing law. The existing law would be Chapter V of the Finance Act and the Central Excise Act. If an application for refund of CENVAT credit had been filed at a point of time when the CGST Act had not been enacted, an appeal would lie before the Tribunal against an order passed on the application filed for refund of CENVAT credit. What has to be seen is whether an appeal can be filed before the Tribunal after the coming into force of the CGST Act against an order passed under sub-section (3) of section 142 of the CGST Act. In view of the specific provisions of sub-section (3) of....