2019 (7) TMI 1834 - AT - Central Excise

Refund of GST - Refund rejected on the ground that assessee had not debited the same amounts and shown it in the respective ST-3 returns - violation of paragraph 2 (h) of N/N. 27/2012-C.E.(N.T.) dated 18.06.2012 - period January 2017 to March 2017 - period April 2017 to June 2017 - HELD THAT - An identical issue with regard to the alleged violation to paragraph 2 (h) of the Notification No. 27/2012 (supra) vis- -vis the claim of refund has been considered by this Bench of the Tribunal in the case of M/S. GLOBAL ANALYTICS INDIA PVT. LTD. VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE 2019 (7) TMI 1185 - CESTAT CHENNAI wherein after considering the various contentions it has been held the appellant did not reverse the equal amount as required by the condition at paragraph 2(h) of Notification No. 27/2012. But the fact also remains that there was no provision in the ACES system to debit the value of refund and also the fact that the entire credit which was carried forward in TRAN-1 stood reversed by the appellant voluntarily in its GSTR-3B filed for the month of April 2018. These are sufficient compliances with the condition at paragraph 2(h) since post G.S.T. the scenario is different than the one prevailing prior to G.S.T. regime. Otherwise it would become an impossible task for an assessee more so when the filing of ST-3 returns itself was done away with. T he denial of refund is not in accordance with law - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of refund under Rule 5 of CENVAT Credit Rules, 2004 for two periods due to migration to GST regime.

Analysis:
The appellant filed refund claims for two periods during the transition to the GST regime, citing an error in transferring the closing balance under CENVAT Account to GST Credit through TRAN-1. The appellant revised its TRAN-1 electronically and requested processing of refund claims without a Show Cause Notice or Personal Hearing. However, the Adjudicating Authority rejected the refund claims, leading to appeals before the First Appellate Authority.

The First Appellate Authority rejected the appeals, emphasizing that the appellant did not debit the same amounts in the ST-3 returns, as required by Rule 7B of the Service Tax Rules, 1994. The Authority noted that the appellant had the opportunity to file revised ST-3 returns within specified timelines but failed to do so due to the GST regime's introduction. Additionally, the Authority highlighted the non-reflection of debit entries in the ST-3 returns, which was deemed non-compliant with relevant notifications.

During the hearing, the appellant's consultant argued that the lower authorities did not consider the facts correctly, while the Revenue's Authorized Representative supported the lower authorities' findings. The Tribunal referred to a previous case where a similar issue was addressed, emphasizing the lack of provision in the system to debit the refund value and the voluntary reversal of credit by the appellant in a subsequent filing. The Tribunal also considered a Board circular supporting the appellant's position and concluded that the denial of refund was not in accordance with the law, setting aside the impugned orders and allowing the appeals with consequential benefits.

In line with the Tribunal's previous ruling and the clarification provided by the Board, the impugned order was overturned, and the appeals were allowed with any consequential benefits as per the law.