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2023 (12) TMI 1145 - AT - Service TaxJurisdiction of CESTAT under GST Act, 2017 - Refund order passed u/s 142 of the Central Goods and Services Tax Act, 2017 - appealable before the Customs, Excise and Service Tax Appellate Tribunal or not - the issue that has been referred to the Larger Bench of the Tribunal is as to whether the order passed under section 142 of the CGST Act is appealable before the Tribunal. HELD THAT - Section 142 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 provisions of sub-section (2) of section 11B of the Central Excise Act. However, no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under the CGST Act - appellant had deposited the short payment of service tax under Chapter V of the Finance Act in respect of import of service on 08.12.2017. Refund of CENVAT credit could have been claimed under rule 4(7) of the CENVAT Rules, which had been framed under section 37 of the Excise Act and section 94 of the Finance Act. Section 173 of the CGST Act provides that save as otherwise provided in the CGST Act, Chapter V of the Finance Act, shall be omitted. Section 174(1) of the CGST Act provides that save as otherwise provided in the CGST Act, on or from the date of commencement of the CGST Act i.e. 01.07.2017, the Excise Act shall stand repealed. Upon repeal of the Excise Act, the CENVAT Rules automatically stood repealed. The appellant, therefore, could not have claimed refund under rule 4(7) of the CENVAT Rules. Before examining whether an appeal would lie to the Tribunal against an order passed under section 142 of the CGST Act, it would be appropriate to examine whether an appeal would lie to the Appellate Tribunal constituted under the CGST Act. 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? - HELD THAT - There is, therefore, no manner of doubt that an appeal against an order passed under section 142 of the CGST Act would lie to the Tribunal - This view also gains support from the fact the legislative intent could not have been to deprive either an assessee or the Revenue from the right of an appeal since an appeal against an order passed under section 142 of the CGST Act would not lie to the Appellate Tribunal constituted under the CGST Act. In the present case, the service tax was paid under the provisions of Chapter V of the Finance Act and refund was claimed under sub-section (3) of section 142 of the CGST Act, under which the claim was required to be disposed of in accordance with the provisions of the existing law. Therefore, even if the service tax had been deposited by the appellant after 01.01.2017, nonetheless the refund of any amount of the CENVAT credit could be claimed only under sub- section (3) of section 142 of the CGST Act and against this order an appeal will lie to the Tribunal. Thus reference answered as - An appeal would lie to the Customs, Excise Service Tax Appellate Tribunal against an order passed under section 142 of the Central Goods and Services Tax Act, 2017. The papers may now be placed before the Division Bench of the Tribunal for deciding the appeal.
Issues Involved:
1. Jurisdiction of CESTAT over refund orders under Section 142 of the CGST Act, 2017. 2. Eligibility for refund of CENVAT credit under the CGST Act, 2017. 3. Applicability of transitional provisions under the CGST Act, 2017. Summary: 1. Jurisdiction of CESTAT over refund orders under Section 142 of the CGST Act, 2017: The primary issue referred to the Larger Bench was 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 (CESTAT). The Tribunal examined relevant provisions and concluded that an appeal against an order under Section 142 of the CGST Act would lie to the CESTAT. The Tribunal emphasized that Section 142(3) mandates that refund claims be disposed of in accordance with the existing law, implying that appellate provisions under the existing law (Chapter V of the Finance Act and the Central Excise Act) continue to apply. Additionally, Section 174(2)(f) of the CGST Act supports the continuation of proceedings under the existing law, reinforcing the Tribunal's jurisdiction over such appeals. 2. Eligibility for refund of CENVAT credit under the CGST Act, 2017: The appellant, having paid service tax under the reverse charge mechanism post-GST implementation, filed for a refund under Section 142(3) of the CGST Act. The Deputy Commissioner rejected the refund claim, reasoning that the CENVAT Rules ceased to be in force after 01.07.2017, and thus, the refund could not be processed under the 'existing law.' The Commissioner (Appeals) upheld this decision, stating that the delayed payment of service tax meant the appellant was not eligible for CENVAT credit under the repealed rules, and therefore, no refund could be granted. 3. Applicability of transitional provisions under the CGST Act, 2017: The Tribunal analyzed transitional provisions, particularly Sections 139, 140, and 142 of the CGST Act, which deal with migration of taxpayers, transitional arrangements for input tax credit, and miscellaneous transitional provisions, respectively. The Tribunal noted that Section 142(3) provides for the disposal of refund claims in accordance with the existing law, and any amount accruing should be paid in cash. The Tribunal also highlighted that Section 174(2)(f) ensures the continuation of proceedings under the existing law, thereby allowing appeals to be filed before the Tribunal. Conclusion: The Tribunal concluded that an appeal against an order passed under Section 142 of the CGST Act is maintainable before the CESTAT. This decision ensures that neither the assessee nor the Revenue is deprived of the right to appeal, maintaining consistency with the legislative intent and transitional provisions of the CGST Act. The reference was answered affirmatively, and the matter was directed to be placed before the Division Bench for further proceedings.
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