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TMI Blog2024 (9) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... L SERVICES PRIVATE LIMITED, GOVERNMENT OF TAMIL NADU, THE CHAIRMAN GSTN [ 2020 (10) TMI 804 - MADRAS HIGH COURT] that there cannot be any transitioning of Cess paid as EC, SHEC and KKC under the provisions of Section 140 of the CGST Act. Coming to the claim of the petitioner that it is entitled to entertain a claim for refund under the provisions of Section 54 of the CGST Act, I am of the view that the said contention cannot be accepted in the light of clear provisions contained in Sub-Section (3) of Section 54 of the CGST Act. It is clear from a reading of Sub- Section (3) of Section 54 of the CGST Act that a claim for refund of the CGST/SGST/IGST (in cash) can be entertained only in two circumstances. The first is where there is a zero-rated supply of goods or services and the second one is, where the refund application arises on account of an inverted duty structure, i.e where the duty to be paid or paid on output services or goods is less than the duty paid on input services or input goods. That apart, the question of entertaining any application for a refund under the provisions of Section 54 of the CGST Act does not arise in the case of the petitioner. The contention of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt took the view that Cess such as EC, SHEC and KKC could not be transitioned with reference to the provisions of Section 140 of the CGST Act. According to the petitioner, it accordingly reversed the transitional credit claimed on account of payment of EC, SHEC and KKC and on such reversal, the petitioner became entitled to seek a refund in terms of the provisions contained in Section 142(3) of the CGST/SGST Acts under the existing law (Finance Act, 1994) and therefore, the petitioner filed a claim for refund of an amount of Rs.1,57,53,287/-. The said application which, is on record as Ext.P4 was rejected finding that the claim was time-barred in terms of the provisions contained in Section 11B of the Central Excise Act, 1944 as made applicable to Service Tax by virtue of the provisions contained in the Finance Act, 1994. The order of the competent authority (respondent No.2) rejecting the refund claimed as time-barred is on record as Ext.P8. In the meanwhile, the petitioner had also filed an application for refund under Section 54 of the CGST Act clearly stating that the same needs to be processed only if Ext.P4 application is rejected by the competent authority. 3. Sri. Jose Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent would submit that the petitioner is clearly not entitled to the benefit of refund of transitioning the amounts paid as EC, SHEC and KKC in terms of the provisions contained in the CENVAT Credit Rules, 2004 (hereinafter referred to as the CENVAT Rules ). It is submitted that the EC, SHEC and KKC could be set off in terms of the provisions contained in the CENVAT Rules only against payment of similar Cess. It is pointed out that the EC and SHEC were abolished on 01.03.2015 and 01.06.2015 respectively. It is submitted that the provisions for collecting KKC continued till the introduction of GST and were abolished with effect from the coming into force of the Taxation Law (Amendment) Act 2017. It is submitted that when amounts paid as EC, SHEC and KKC could be utilized only for setting off payments to be made against such Cess, the petitioner had no right to maintain any application for refund of the unutilized portion of credit available on account of payment of EC, SHEC and KKC. It is submitted that the issue raised by the petitioner is squarely covered against the petitioner in view of the judgment of the Division Bench of the Madras High Court in Sutherland Global Services Priv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 140, which was emphasized by the learned counsel for the Assessee before us, is not excluded from the effect and operation of Explanation 3, because the exclusion is of any Cess which has not been specified in Explanations 1 and 2, Education Cess and Secondary and Higher Education Cess and Krishi Kalyan Cess are not included in Explanations 1 and 2 at all. Therefore, the exclusion of Education Cess and Secondary and Higher Education Cess for the purpose of carry forward and set off under Section 140 is specifically provided in Explanation 3, which is clearly applicable to gather the legislative intent, irrespective of piecemeal enforcement of Explanations 1 and 2 by the Legislature. Explanation 3 has its own force and application and does not have a limited application only via the route of Explanation 1 and Explanation 2. The Departmental Circular dated 02.01.2019, quoted above, in our opinion, rightly clarified this position with reference to Explanation 3 to Section 140 of the Act 39 ..The taking of the input credit in respect of Education Cess and Secondary and Higher Education Cess in the Electronic Ledger after 2015, after the levy of Cess itself ceased and stopped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therland Global Services Private Limited (supra) there was no provision enabling the petitioner to claim the transition of EC, SHEC and KKC to the GST regime and the question of entertaining any application for a refund under the provisions of Section 54 of the CGST Act does not arise. 7. The contention of the learned counsel appearing for the petitioner that various Tribunals had taken a view contrary to the view taken by this Court and has held that EC, SHEC and KKC paid at the relevant time under the provisions of the Finance Act 1994 can be refunded cannot be accepted. In view of the statutory provisions discussed above, the view taken by various Tribunals does not appear to be in accordance with the statutory provisions. 8. At this stage, the learned counsel appearing for the petitioner vehemently contends that the application filed for refund under Section 54 of the CGST Act should have been considered and a speaking order should have been passed by the competent authority. It is pointed out that Ext.P5 remains unattended and no order has been passed by the competent authority till today. In light of the view that I have taken of the statutory provisions and since the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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