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TMI Blog2025 (1) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ried forward as form GST TRAN-1 was already filed prior to revision of the ST-3 return. Only for this reason refund claim of admitted Cenvat credit accrued prior to 30.06.2017 cannot be rejected. The appellant is eligible for refund in terms of section 142 (3) of CGST ACT, 2017. From the plain reading of the above provision of Section 142 it can be seen that those amount of Cenvat credit which could not be transferred under GST after 01.07.2017, the same is refundable under the existing Act. In the present case due to non mention of part amount of Cenvat Credit in ST-3 return for April June 2017 same could not be transferred to TRTRAN-1 - the refund cannot be rejected because the amount of Cenvat credit could not be transferred to TRAN-1 under GST. Reliance can be placed in M/S. GIGAMON SOLUTIONS PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2024 (6) TMI 1111 - CESTAT CHENNAI] where it was held that ' the appellant has paid the tax under the erstwhile law. In the present case, the claim is only for refund and not proceedings for assessment or adjudication. In such a scenario, sub-section (3) of section 142 gets attracted. Rejection of the refund claim is not le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed ST-3 return, pertained to Service Tax paid by the Appellant under reverse charge mechanism. However, this could not be carried forward as Form GST TRAN-1 was already filed prior to revision of the ST-3 return. Subsequent to above, the Appellant, in term of Section 142 (9) (b) of the CGST Act, filed a refund claim in Form R along with necessary documents on 28.06.2018, for the differential Cenvat credit viz. Rs. 1,11,37,766/-, which was enhanced on account of filing of revised ST-3 return. A Show Cause Notice dated 09.07.2018 was issued to the Appellant, requiring it to show cause as to why the refund amount of Rs. 1,11,37,766/- should not be rejected on the ground that there is no enabling provision under the Excise Act, where refund of closing balance of Cenvat credit can be allowed in cash. Plain reading of Section 11B of Excise Act conveys that only duty of Excise and interest can be refunded under Section 11B, however, the Appellant has applied for refund of closing balance of Cenvat credit which has not been carried forward to GST. The aforesaid Show Cause Notice was adjudicated upon by the Ld. Assistant Commissioner vide Order-in-Original No. 14/Ref/V/18-19 dated 05.09.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven facts. The facts of the present case are specifically covered under the provisions of Section 142 (9) (b) of the CGST Act, under which the Appellant can claim refund of the additional claim of Cenvat credit. Further, no such stipulation has been made in Section 142 (9) (b), that the facility thereunder will be available only after expiry of time-period for filing/revision of Form GST Tran-1. A.5. In such a case, the Appellant has rightly filed refund claim under Section 11B of the Excise Act read with Section 142 (9) (b) of the CGST Act. It may also be noted that though such claim has been filed under Section 11B of the Excise Act, the enabling provision for such refund arises in terms of Section 142 (9) (b) of the CGST Act, which overrides the provisions of the existing law, except Section 118(2) of the Excise Act. A.6. The Appellant submit that a mere procedural lapse cannot take away a vested right to claim refund of Cenvat credit. It has been opined by this Hon'ble Tribunal in the case of M /s Gigamon Solutions Pvt Ltd vs. Commissioner of GST and Central Excise, Chennai, 2024-VIL-687-CESTAT-CHE-ST wherein it was held that Section 142 (3) of CGST Act, 2017 provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its original ST-3 return in terms of Section 140 (1). It was only in respect of the additional Cenvat credit, which could not be claimed in the original ST-3 return, that the Appellant revised its ST-3 return and claimed refund under Section 142 (9) (b) of CGST Act. It cannot be said that in such a case, the provisions of Section 140 (1) have been rendered redundant B. 4 The impugned order, thus, deserves to be quashed and set aside. C. The very basis of the impugned proceedings is legally incorrect. The findings in the OIO and the Impugned order are beyond the scope of SCN. C. 1 The Appellant submit that the very basis of the impugned proceedings is legally incorrect. Attention, in this regard, is invited to the SCN dated 09.07.2018, which was issued on the sole ground that there is no provision in the Excise Act regarding refund of balance Cenvat credit not carried forward in Form GST Tran-1. C. 2 Before determining whether such allegation is legally correct, it may be noted that the same is the only allegation in the SCN, based on which it was proposed to reject the refund claim of the Appellant. There was no other allegation in the SCN. C. 3 It is submitted that the said all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act, except sub-section (2) thereof. When such enabling provisions were enacted under Section 142 (9) (b) of the CGST Act, the proposal in the SCN to reject refund claim of the Appellant citing absence of enabling provision under Section 11B of the Excise Act was incorrect. C. 8 In any case, it is submitted that the said finding in the OIO was without any basis. Whether any additional Cenvat credit was admissible to the Appellant, was to be decided on basis of the qualification of the subject services as input service' under the Cenvat Credit Rules, 2004. To support its claim, the Appellant submitted copies of the relevant invoices, on which such credit was claimed, along with the challans, under which payment of Service Tax thereon was made under reverse charge mechanism. C. 9 Thus, the refund claim of the Appellant could not have been validly rejected on basis of the sole allegation in the SCN and on this, ground alone, the demand become liable to be dropped. D. The Appellant is entitled to interest on refund amount. D. 1 The Appellant submits that in the light of the aforesaid submissions, the Impugned Order upholding rejection of refund claim filed by the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer: PROVIDED that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply. (2) (a) Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the existing Act. In the present case due to non mention of part amount of Cenvat Credit in ST-3 return for April June 2017 same could not be transferred to TRTRAN-1. In our view to deal with these eventualities the provision of Section 142 (3) was enacted and therefore the refund cannot be rejected because the amount of Cenvat credit could not be transferred to TRAN-1 under GST. This issue has been considered in various judgments. Some judgments are as under: Gigamon Solutions Pvt Ltd Vs. CGST 2024 (6) TMI 1111-CESTAT Chennai This appeal is filed by M/s. Gigamon Solutions Pvt. Ltd. against Order in Appeal No. 174/2019 (CTA-I) dated 12.6.2019 passed by the Commissioner of GST Central Excise (Appeals -1), Chennai. 2. Brief facts of the case are that the appellant is providing Information Technology Software Services. Technical Testing and Analysis Service etc. The appellant had received services from their associated enterprises located outside India in the year 2017-18, during the erstwhile service tax regime and also made a debit in their books of account during the service tax regime. However, the invoices for the said services were raised by the service provider during the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0021/2023 dated 21.12.2023) wherein it had been held that even if the service tax has been deposited by the appellant after 1.1.2017, nonetheless the refund of CENVAT credit could be claimed under sub-section (3) of Section 142 of the CGST Act before CESTAT. Hence the appellant is eligible for refund under Section 11B of the Central Excise Act, 1944 read with Section 142 (3) of the CGST Act, 2017. The OIO DIA has travelled beyond the SCN since there was no allegation of suppression of facts with an intention to evade duty or contravention of Rule 9 of CENVAT Credit Rules, 2004 in the SCN. Further this is a case where the appellant has Suo-moto disclosed the transaction and deposited the tax along with interest without any audit/investigation and hence the question of suppression of facts with an intention to evade duty does not arise. Further, the OIO as well as OIA claims that separate action is being initiated for levy of penalty under Section 78 of the Finance Act, 1994, However, no such action has been taken till date. He prayed that the appeal may be allowed, with consequential relief. 3.2 Shri N. Satyanarayanan, learnd AR reiterated the findings in the impugned order. He stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department to issue Show Cause Notice for any violations of the erstwhile law, reciprocally the assessee can file refund claims for the rights accrued under the erstwhile legislations under the provision of section 142 (3) of CGST Act, 2017. 7. In the case of Adfert Technologies Pvt. Ltd. Vs. Union of India - 2020 (32) GSTL 726 (P H ), it is held that transitional credit being vested right cannot be taken away on procedural or technical ground. This decision was upheld by the Hon'ble Supreme Court as reported in 2020 (34) GSTL J138 (SC). Again, the jurisdictional Hon'ble High Court in the case of Tara Exports Vs. Union of India reported in 2019 (20) GSTL 321 (Mad.) has held that GST law contemplates seamless flow of tax credit on all eligible inputs. It is settled legal position that substantive credit cannot be denied on procedural grounds. 8. We find that the appellant has paid the tax under the erstwhile law. In the present case, the claim is only for refund and not proceedings for assessment or adjudication. In such a scenario, sub-section (3) of section 142 gets attracted. Rejection of the refund claim is not legally valid and merits to be set aside 9. For the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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