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2021 (10) TMI 1345 - AT - Service TaxJurisdiction - power of CESTAT having been constituted under the Customs Act 1962 can look into and decide refund claims under C.G.S.T. upon the introduction of the Central Goods and Services Tax Act 2017 - Refund of amount of service tax paid - HELD THAT - The transfer of CENVAT Credit lying as balance as input credit is purely a provision of the C.G.S.T. Act and CESTAT has no role in interpreting or applying the said provisions. We find that there is a clear divergence taken in this decision. In many decisions of this Tribunal this Tribunal has considered the refund matter which was under Section 142(3) of the C.G.S.T. Act and decided the appeal. Therefore there are nothing wrong in referring the matter by the Learned Single Member to the Larger Bench - the reference made by the Learned Single Member is correct and legal. Whether this Tribunal has jurisdiction to entertain the appeal in question? - Section 142(3) of the C.G.S.T. Act 2017 - HELD THAT - As per Section 142(3) only those claims in which the amount of CENVAT Credit duty interest was paid in the existing law i.e. the Central Excise Act 1944 and and the Finance Act 1994 shall be disposed of in accordance with the same Acts. In the present case the appellant had paid the Service Tax subsequent to the introduction of the C.G.S.T. Act and thereby the CENVAT Credit got accrued to the appellant. In this case it is not the refund of Service Tax paid under the existing law whereas the refund sought for by the appellant is in respect of the CENVAT Credit which accrued after the introduction of the C.G.S.T. Act 2017 - Moreover there is no provision either in the Central Excise Act or the Finance Act for refund of CENVAT Credit. The refund of CENVAT Credit was provided 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. To have a consistent view and uniform legal position in the interests of justice this matter must be decided by a Larger Bench. The question to be answered by the Larger Bench is referred as under Whether a refund order passed under Section 142 of the Central Goods and Services Tax Act 2017 is appealable before the Customs Excise and Service Tax Appellate Tribunal or otherwise? The Registry is directed to place this matter before the Hon ble President for constituting a Larger Bench to decide the above question of law.
Issues Involved:
1. Jurisdiction of CESTAT to decide refund claims under the C.G.S.T. Act, 2017. Issue-Wise Detailed Analysis: 1. Jurisdiction of CESTAT to Decide Refund Claims Under C.G.S.T. Act, 2017: Background and Facts: The appellant's accounts were audited, and an objection was raised regarding the short payment of Service Tax under the reverse charge mechanism for the period from 2015 to June 2017. The appellant paid the Service Tax along with interest following the audit objection and later sought a refund of the Service Tax paid, claiming it was eligible as CENVAT Credit under the CENVAT Credit Rules, 2004. A Show Cause Notice was issued proposing to reject the refund claim on the grounds that the appellant had not substantiated their eligibility to avail the CENVAT Credit and that there was no provision under the existing law to claim a refund of Service Tax paid under the reverse charge mechanism. The refund claim was rejected by the Order-in-Original, which was upheld by the Commissioner of Central Tax (Appeals-II). The appellant then appealed to the Tribunal. Referral to Larger Bench: The Single Member Bench referred the matter to the Larger Bench to address the question of law: "Whether the CESTAT, having been constituted under the Customs Act, 1962, can look into and decide refund claims under C.G.S.T. upon the introduction of the Central Goods and Services Tax Act, 2017, which is a self-contained code having its own appellate mechanisms?" Arguments by the Appellant: The appellant argued that as per Section 142(3) of the C.G.S.T. Act, the refund of CENVAT Credit should be dealt with under the existing law, i.e., the Central Excise Act and the Finance Act. Therefore, the order passed under the existing law is appealable before the CESTAT. The appellant cited various judgments where the Tribunal entertained appeals and allowed refunds under similar circumstances, asserting that there was no divergence of views requiring a reference to the Larger Bench. Arguments by the Revenue: The Revenue contended that the refund pertained to Service Tax paid belatedly and sought under Section 142(3) of the C.G.S.T. Act, 2017, thus falling under the provisions of the C.G.S.T. Act. Therefore, the appeal does not lie before the CESTAT. Tribunal's Analysis and Decision: The Tribunal examined the decision in the case of M/s. United Seamless Tubular Pvt. Ltd., which held that CESTAT has jurisdiction to interpret and apply the provisions of the C.G.S.T. Act only to the extent they modify the provisions of the Central Excise Act and Finance Act, 1994. It was found that there was a clear divergence in decisions, with some cases being decided by the Tribunal under Section 142(3) of the C.G.S.T. Act. Conclusion: The Tribunal concluded that the reference made by the Single Member was correct and legal. It opined that the refund claim under Section 142(3) of the C.G.S.T. Act, 2017, should be disposed of under the C.G.S.T. Act, and any order passed under the C.G.S.T. Act is appealable to the GST Appellate Tribunal, not the CESTAT. However, given the conflicting decisions, the Tribunal referred the matter to a Larger Bench to decide the question of law: "Whether a refund order passed under Section 142 of the Central Goods and Services Tax Act, 2017 is appealable before the Customs, Excise and Service Tax Appellate Tribunal or otherwise?" Order: The Registry was directed to place the matter before the Hon’ble President for constituting a Larger Bench to decide the above question of law.
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