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2024 (10) TMI 1061 - AT - Service TaxCash refund of CENVAT Credit in terms of Section 142(9)(b) of the C.G.S.T. Act - time limitation - violation of principle sof natural justice - HELD THAT - The issue involved in this matter has been examined by the Tribunal in the case of M/S. CIRCOR FLOW TECHNOLOGIES INDIA PRIVATE LTD. VERSUS PRINCIPAL COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE 2021 (12) TMI 675 - CESTAT CHENNAI , wherein this Tribunal examined this issue and observed ' In the present case, there is no allegation that the credit is not eligible to the appellant. It is merely stated that tax has been pald voluntarily and therefore credit is not available under the GST regime. Though credit is not available as Input Tax Credit under GST law, the credit under the erstwhile Cenvat Credit Rules is eligible to the appellant. Such credit has to be processed under Section 142(3) of GST Act, 2017 and refunded in cash to the assessee.' It is found that in this case also, the appellant paid the license fees on 17th March, 2017, when the erstwhile provisions of service tax was in force, but reversed the credit on 26th September, 2017 and October 2017. We observe that the issue of timelimit has been examined by this Tribunal in the case of OSI SYSTEMS PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX RANGAREDDY - GST 2022 (9) TMI 801 - CESTAT HYDERABAD wherein this Tribunal found that for transitional provisions under Section 142(3) of the C.G.S.T. Act, the limitation has been done away with and only thing required for refund is whether, under the facts and circumstances of the said case, unjust enrichment is attracted or not. In this case also, the refund claim has been rejected as time barred. The only issue to be seen is whether bar of unjust enrichment is applicable to the facts of this case. In that circumstances, the impugned order is set aside and the appeal is allowed, with a direction to the adjudicating authority to entertain the refund claim filed by the appellant on its own merits. The appeal is disposed of.
Issues:
1. Denial of cash refund to the appellant by the authorities below. 2. Eligibility for refund of CENVAT credit under GST transitional provisions. 3. Alleged violation of Rule 7 of the Point of Taxation Rules, 2011 and Rule 7B of Service Tax Rules, 1994. 4. Interpretation of Section 142(3) and Section 142(9)(b) of the CGST Act 2017. Analysis: Issue 1: Denial of cash refund The appellant, engaged in manufacturing and sale, sought a refund of CENVAT credit of Service Tax paid under reverse charge mechanism due to the implementation of GST. The refund application was rejected by the authorities below, leading to the appeal. Issue 2: Eligibility for refund under GST transitional provisions The appellant argued for refund eligibility under Section 142(3) and Section 142(9)(b) of the CGST Act 2017, citing precedents where the right to avail credit under the erstwhile law of Finance Act, 1994 was protected even after the introduction of GST. The Tribunal held that the denial of the refund claim was unjustified, setting aside the impugned order and allowing the appeal with consequential relief. Issue 3: Alleged violation of tax rules The appellant faced allegations of violating Rule 7 of the Point of Taxation Rules, 2011, and Rule 7B of Service Tax Rules, 1994. However, the Tribunal's analysis focused on the applicability of transitional provisions under GST, emphasizing the protection of rights accrued under the previous law. Issue 4: Interpretation of relevant provisions The Tribunal referred to previous judgments highlighting that transitional credit is a vested right and cannot be denied on procedural grounds. It clarified that while credit might not be available under the GST regime, the appellant was eligible for CENVAT credit under the erstwhile rules, warranting a refund in cash. The Tribunal directed the adjudicating authority to process the credit refund based on its merits, emphasizing the principles of seamless flow of tax credits under GST laws. In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and directing the adjudicating authority to entertain the refund claim on its merits, emphasizing the protection of vested rights under transitional provisions of the GST Act.
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