2021 (11) TMI 338 - AT - Service Tax

Refund claims of unutilized cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 - Notification 27/2012-CE (NT) - Claim of refund rejected on the ground that the appellant had carried forward the same into its Tran-1 Form of GST. - HELD THAT - there are no disputes as to the facts. It is now the case of the appellant that it has reversed the entire credit covering the appeal period in their GST Electronic Credit Ledger filed for March 2021. They have also filed copy of the Form GSTR-3B in support, before this forum. It is the settled position of law that a substantial right of a tax payer cannot be denied on mere procedural lapse, which is reaffirmed by this very Bench in the case of JMT Consultant Detailing Pvt. Ltd. Vs. CCT, Bengaluru East 2019 (12) TMI 648 - CESTAT BANGALORE . Refund to be allowed, subject to verification.

Summary

Issues:
Challenge to rejection of refund claim under Cenvat Credit Rules, 2004 based on carrying forward credit to GST Tran-1 Form.

Analysis:
The appellant challenged the rejection of their refund claims under Rule 5 of the Cenvat Credit Rules, 2004, for the periods between October 2016 to June 2017. The adjudicating authority had rejected the refunds on the grounds that the appellant had carried forward the credit into its GST Tran-1 Form. The first appellate authority upheld this rejection, leading to the filing of the present appeals.

During the hearing, it was established that the appellant had reversed the entire credit for the appeal period in their GST Electronic Credit Ledger filed for March 2021. They also submitted a copy of Form GSTR-3B in support of this claim. The appellant argued that their substantial right as a taxpayer should not be denied due to a procedural lapse, citing a previous case decided by the same Bench.

The Tribunal acknowledged the settled legal principle that a taxpayer's substantial right should not be denied due to a mere procedural lapse. Referring to a previous case, the Tribunal held that the authorities erred in rejecting the appellant's refund claim for not reversing the cenvat credit. The Tribunal remanded the matter to the original authority to verify the appellant's claim of having effected the reversal, considering that this supporting document was not available to the authority earlier. The appellant was instructed to cooperate with the adjudicating authority and provide any necessary supporting documents. The appeal was disposed of accordingly.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, the legal principles applied by the Tribunal, and the final decision reached in the matter.