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TMI Blog2023 (12) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... 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in the CGST Act, on or from the date of commencement of the CGST Act i.e. 01.07.2017, the Excise Act shall stand repealed. Upon repeal of the Excise Act, the CENVAT Rules automatically stood repealed.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 appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, the learned Member referred the matter to the Division Bench for deciding: Whether the CESTAT, having been constituted under the Customs Act, 1962, can look into and decide refund claim under C.G.S.T. upon the introduction the Central Goods and Services Tax Act, 2017, which is a self-contained code having its own appellate mechanisms? 3. It would be appropriate to first briefly narrate the dispute that had led to the filing of this appeal before the Tribunal. 4. M/s. Bosch Electrical Drive India Private Limited [the appellant] discharged service tax under the provisions of Chapter V of the Finance Act, 1994 [the Finance Act] and availed CENVAT credit of the tax paid under the provisions of the CENVAT Credit Rules, 2004 [the CENVAT Rules] . 5. Pursuant to an audit conducted by the department in November 2017, the appellant was served with an audit objection that it had short paid service tax under reverse charge mechanism on the import of services. The appellant paid an amount of Rs. 39,18,672/- towards service tax with interest under reverse charge for import of services on 08.12.2017. The appellant claims that it was eligible to claim input credit un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for your ready reference. ***** In view of the above, we request your goodselves to grant us the refund of Rs. 39,18,672/- for the Service tax amount paid against the import services and we seek your permission to represent before your goodselves for any clarifications required in this regard. 6. A show cause notice dated 31.07.2018 was, however, issued to the appellant seeking to reject the claim as there was no provision under the CGST Act to process such claims. 7. The appellant filed a reply to the show cause notice reiterating that it was entitled to refund in cash in view of the provisions of section 142(3) of the CGST Act. 8. The Deputy Commissioner, by order dated 24.04.2019, rejected the refund claim filed by the appellant for the reason that after the implementation of CGST Act on 01.07.2017, the CENVAT Rules ceased to be in force and the claim under section 142(3) of CGST Act cannot be considered to be under the existing law as the service tax was not paid in time but on 08.12.2017 after the CGST Act had come into force. The operative part of the order passed by the Deputy Commissioner is reproduced below: 6.3 The assessee in their refund appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the assessee's claim cannot be sanctioned and is liable for rejection. (emphasis supplied) 9. Feeling aggrieved by the said order, the appellant filed an appeal before the Commissioner (Appeals), which appeal was dismissed by order dated 21.09.2019 and the relevant portions of the order are reproduced below: 9. The respondent has found that the amount paid by the appellant is not eligible to him as refund as the appellant has made the payments on being detected by audit, on 8.12.2017, which is much later than the date from which the CENVAT Credit Rules, 2004 ceased to be in force. Payment of the amount on such a later date for the earlier periods i.e. 2015-16 onwards could only be treated as tax arrears. Delayed payment on the part of the appellant has resulted in a situation where there is no provision under the rules to be eligible for the credit. For these reasons, the case laws cited by the appellant are not applicable to the present case. Claiming refund on this score has rightly been rejected by the respondent. 10. In fact, Section 142(8) of the CGST Act, 2017 states that where in pursuance of an assessment or adjudication proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, interest was paid in the existing law, i.e., the Central Excise Act, 1944 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. 13. 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. 14.1 There is a specific provision for refund of CENVAT Credit under the C.G.S.T. Act. The refund of CENVAT Credit is required to be disposed of under the C.G.S.T. Act only and any order passed under the C.G.S.T. Act is appealable before the GST Appellate Tribunal in terms of Section 112(1) of the Act, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Tribunal to decide whether a refund order passed under Section 142 (3) of the CGST Act, would be appealable before the Tribunal. The relevant paragraphs of the order are reproduced below: 15. However, this Tribunal in various cases, as cited by the Learned Counsel for the appellant, entertained the appeal and disposed of in respect of refund claim under Section 142(3). One of the decisions is of the Division Bench in the case of M/s. Toshiba Machine (Chennai) P. Ltd. v. Commr. of Central Tax, Chennai [2019 (27) G.S.T.L. 216 (Tri. Chennai)] wherein the Tribunal has entertained the appeal in the case of refund under Section 142(3) of the C.G.S.T. Act, 2017. 16. In this position, we are of the view that to have a consistent view and uniform legal position, in the interests of justice, this matter must be decided by a Larger Bench. (emphasis supplied) 15. Shri Raghavan Ramabadran, learned counsel made submissions on behalf of the appellant, while Shri V.S. Jayakumar, learned senior counsel assisted by Shri Mudit Bohara made submissions on behalf of the intervener. Shri M. Ambe, learned authorized representative made submissions on behalf of the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst him under section 107 or section 108 of the CGST Act may appeal to the GST Appellate Tribunal. Section 107 provides that any person aggrieved by any decision passed under the CGST Act by an adjudicating authority may appeal to the GST Appellate Tribunal. Section 108 of the CGST Act deals with powers of the Revisional Authority and provides that the Revisional Authority may on its own motion or upon information received, call for and examine the record of any proceeding and if he considers that any decision or order passed under the CGST Act by any officer sub-ordinate to him is erroneous he may pass such order as he thinks just and proper. 24. Chapter XX of the CGST Act deals with Transitional Provisions . It contains, amongst others, sections 139, 140 and 142. 25. Section 139 of the CGST Act, which came into force on 22.06.2017, deals with migration of existing taxpayers . Sub-section (1) of section 139 is reproduced below: 139 (1) On and from the appointed day, every person registered under any of the existing laws and having a valid Permanent Account Number shall be issued a certificate of registration on provisional basis, subject to such conditions and in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him 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, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act: Provided that 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 this Act; (b) every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that save as otherwise provided in this Act, Chapter V of the Finance Act shall be omitted. Section 174(1) of the CGST Act further provides that save as otherwise provided in this Act, on and from the date of commencement of this Act i.e. 01.07.2017, the Excise Act and some other Acts referred to are repealed. As the CENVAT Rules were framed under the Excise Act, the appellant could not have claimed CENVAT credit in respect of the input service under the provisions of the CENVAT Credit Rules after 01.07.2017 as they ceased to exist. The appellant could also not have carried forward the amount of CENVAT credit in the return under section 140(1) of the CGST Act as the return had been filed before the deposit of the service tax on 08.12.2017. 31. The factual position and the relevant provisions of the CGST Act and the CENVAT Rules have been examined. The submissions made by the learned counsel for the appellant, the learned senior counsel for the intervener and the learned authorized representative appearing for the department can now be considered. 32. The submissions advanced by the learned counsel for the appellant are: (i) The refund claims of amount paid under the exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) In the present case, the proceedings had been initiated under the existing law by the officers of the Service Tax Department exercising powers under the Finance Act and the refund was filed under section 11B of the Excise Act read with section 142(3) of the CGST Act. 33. Learned senior counsel for the intervener submitted that in view of the Transitional Provisions contained in the Chapter XX of the CGST Act, the Tribunal would have the jurisdiction to decide appeals as per the existing law. 34. Learned authorized representative appearing for the department, however, submitted that since the refund was made in accordance with section 142(3) of the CGST Act, the officers who were appointed as per section 3 of the CGST Act, the first Appellate Authority defined under section 2(8) of the CGST Act, and the Appellate Authority defined under section 2(9) of the CGST Act are empowered to dispose of the refund claim and the Tribunal would not have the jurisdiction to entertain the appeal. Learned authorized representative also contended that the appellant is not justified in placing reliance upon section 174(2)(e) and section 174(2)(f) of the CGST Act. 35. The submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not have claimed refund under rule 4(7) of the CENVAT Rules. The appellant could also not have taken in his electronic credit ledger the amount of the CENVAT credit under section 140(1) of the CGST Act because the service tax return had been filed before the deposit of the service tax. It is for this reason that the appellant had filed an application under sub- section (3) of the section 142 of the CGST Act, which application was rejected and the appeal filed by the appellant before the Commissioner (Appeals) was also rejected. 41. 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. 42. Under section 112 of the CGST Act, an appeal would lie before the Appellate Tribunal constituted under the CGST Act against an order passed under section 107 or section 108 of the CGST Act. It is, therefore, clear that against an order passed under sub-section (3) of section 142 of the CGST Act an appeal would not lie before the Appellate Tribunal constituted under the CGST Act. 43. It now needs to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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. 48. The Division Bench of the Tribunal, while referring the matter to the Larger Bench had observed in paragraph 14.1 that an appeal would lie under section 112 of the CGST Act to the Appellate Tribunal constituted under the provisions of the CGST Act against an order passed under sub-section (3) of section 142 of the CGST Act. As noticed above, an appeal would not lie before the Appellate Tribunal constituted under the provisions of the CGST Act because an appeal lies only against an order passed either under section 107 or section 108 of the CGST Act. 49. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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