The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that the Appeal lies to CESTAT against order passed under Section 142 of the Central Goods and Services Tax Act, 2017 (CGST Act).
Pursuant to an audit conducted by the department in November 2017, the appellant, M/s. Bosch Electrical Drive India Private Limited 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 claimed that it was eligible to claim input credit under the CENVAT Rules on the aforesaid amount, but it was disabled from taking such credit as the Central Goods and Services Tax Act, 2017 had come into force w.e.f. 01.07.2017 and the CENVAT Rules stood repealed.
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. 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.
Under sub-section (3) of section 142 of the CGST Act, the claim for refund of any amount of CENVAT credit has to be disposed of in accordance with the provisions of the existing law. The existing law would be Chapter V of the Finance Act and the Central Excise Act. If an application for refund of CENVAT credit had been filed at a point of time when the CGST Act had not been enacted, an appeal would lie before the Tribunal against an order passed on the application filed for refund of CENVAT credit.
A Three Member Bench of the Tribunal comprising Justice Dilip Gupta, President, DM Misra, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “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 subsection (3) of section 142 of the CGST Act and against this order an appeal will lie to the Tribunal.”
“The reference is, accordingly, answered in the following manner: 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 Tribunal concluded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
