CESTAT Grants Refund of Rs. 8.36 Lakh to Tata Steel BSL Limited, Sets Aside impugned Order for Contravening S.142 of CGST Act [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled in favour of Tata Steel BSL Limited, directing the refund of Rs. 8.36 lakh in unutilized Education Cess and Secondary & Higher Education Cess (SHE Cess) that remained in the company’s CENVAT credit account as of June 30, 2017.

 The appellant in this case, Tata Steel BSL Limited, applied for a refund of Rs. 8,36,196, representing the closing balance of cess credits that could not be transitioned to the GST regime. The appellant had carried forward the amount by filing a TRAN-1 form but later reversed it after departmental objections.

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 The refund claim was rejected by the original authority and upheld by the Commissioner (Appeals), citing the absence of provisions under the CENVAT Credit Rules, 2004, for cash refunds except in cases of export-related claims under Rule 5. 

Interestingly, one of the submissions made by the appellant’s counsel was that their right to claim a refund cannot be solely rejected just due to the fact of change of legislation.

The tribunal was of the opinion that the provisions of Section 142 of the CGST Act, 2017 were sufficient to provide for sanction of cash refund in circumstances stated therein, and that there was no need to make any specific provision in the CENVAT statute itself for enabling cash refund of excess CENVAT credit relating to the earlier regime while moving to the new GST regime. 

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The CESTAT, comprising M.M. Parthiban (technical member), did not find any merit in the impugned order and set aside the same.

CESTAT noted that Sections 142(3) and 142(9)(b) of the CGST Act explicitly mandate cash refunds for unutilized CENVAT credit arising from the pre-GST regime. The tribunal observed that the transitional provisions under the CGST Act override conflicting provisions of the Central Excise Act, except for unjust enrichment clauses under Section 11B(2).

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In conclusion, CESTAT directed the refund of Rs. 8,36,196 to Tata Steel BSL Limited and set aside the order by the Commissioner (Appeals), which had denied the refund, and held that the rejection contravened the transitional provisions under Section 142 of the Central Goods and Services Tax (CGST) Act, 2017. 

To Read the full text of the Order CLICK HERE

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