The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Right to claim Service Tax Refund cannot be frustrated for procedural requirement of filing TRAN-1 before December 27, 2017.
The appellants, M/s. Bharat Heavy Electricals Ltd. are engaged in manufacture of boiler auxiliaries namely electrostatic precipitator, air preheaters, fans etc. and are registered with the Central Excise Department. They also have Service Tax registration as they are service providers as well as recipients of service. After introduction of GST, they migrated to GST and obtained necessary registration.
The appellant contended that the department has no case that the credit availed by them for which refund claim has been filed is ineligible. The refund claim has been rejected merely stating that the appellant has not availed the credit and carried forward to GST regime by filing TRAN-1. That the time for filing such TRAN-1 has expired on 27.12.2017 and therefore the appellant cannot claim refund.
The coram of Judicial Member, Sulekha Beevi C.S. held that the appellant would be eligible to avail credit but for the introduction of GST law. The said right cannot be frustrated by pressing on the procedural requirement of filing TRAN-1 before 27.12.2017. The accounting practice adopted by the appellant allows to avail credit only after making payments to the vendors which has made it impossible to carry forward the credit as set out in the GST law. When the credit is eligible, the same cannot be denied by stating procedural requirements.
“There is no allegation raised by the department that the appellant is not eligible to avail credit of the duties / taxes paid on the inputs / input services. To put it more clearly, the appellant would be eligible to avail the credit but for the introduction of new GST law. It is also explained by the appellant that they are able to avail credit only after they make the full payment to the vendors,” the CESTAT added.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
