2019 ACR 759 CESTAT Chennai
REGIONAL BENCH – COURT NO. I
M/s. Fine Automotive and Industrial Radiators Pvt. Ltd.
Vs
The Commissioner of G.S.T. & Central Excise
HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)
Excise Appeal No. 40630 of 2019 Final Order 41396/2019 dated 20.11.2019
(Arising out of Order-in-Appeal No. 33/2019 (CTA-I) dated 21.01.2019 passed by the Commissioner of G.S.T. and Central Excise (Appeals-I), 26/1, Mahatma Gandhi Marg, Nungambakkam, Chennai – 600 034)

Note –

Application filed for refund of credits on services received prior to 1st July 2017 i.e. introduction of GST using miscellaneous transition provisions under CGST Act 2017. Credit rejected on the grounds that the CENVAT Credit pertaining to the services had not been reflected as balance transitional credit in their statutory returns by lower authorities. Appellant not otherwise found to be ineligible for credits.

It is the introduction of the C.G.S.T. Act that prompted the appellant to claim the refund because they were unable to carry it forward, which fact also satisfies the requirements of the second proviso to Section 142 (3) of the C.G.S.T. Act, 2017. Appellant is entitled to refund.

 

Present:

Shri. M.N. Bharathi, Advocate for the Appellant

Shri. Arul C. Durairaj, Authorized Representative (A.R.) for the Respondent

 

ORDER

The only issue involved in this appeal is the eligibility of the appellant for claiming the refund partially pertaining to the services received by them prior to 01.07.2017 and partially pertaining to the Service Tax paid under reverse charge mechanism on Goods Transport Agency (G.T.A.) for the quarter ending June 2017.

 

  1. When the matter was taken up for hearing, M.N. Bharathi, Ld. Advocate, appeared for the assessee- appellant and Shri. Arul C. Durairaj, Ld. Superintendent (Authorized Representative), appeared for the Revenue.

 

  1. Heard both sides and perused the documents placed on record.

 

4.1 The undisputed facts are that the services were rendered prior to the introduction of G.S.T. (i.e., 01.07.2017); the refund was claimed vide application dated 26.06.2018 on the ground that the Service Tax was paid on reverse charge mechanism on inward freight service, courier service, inward parcel service, lab testing charges service, MRS and telephone bills for the period from April 2017 to June 2017; that there was no provision for taking the credit of the aforesaid amount paid under reverse charge mechanism in their electronic credit account after the introduction of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as the ‘C.G.S.T. Act’) and that the application for refund was filed invoking the miscellaneous transition provisions.

 

4.2 A Show Cause Notice dated 29.06.2018 came to be issued proposing to reject the same by the Revenue on the grounds that the appellant’s claim did not fit into the governing transitional provisions of Section 142 of the C.G.S.T. Act, 2017, the same was confirmed in the Order- in-Original dated 29.08.2018, which subsequently came to be upheld by the Commissioner of G.S.T. and Central Excise (Appeals-I), Chennai vide impugned order.

 

  1. The Ld. Commissioner (Appeals) in the impugned order has observed, while recording the facts not in dispute, that the appellant had received certain input services during the period from April 2017 to June 2017; since the CENVAT Credit pertaining to the services had not been reflected as balance transitional credit in their statutory returns, they were not able to transfer the credit amount in their TRAN-1 into G.S.T. regime. Ld. Commissioner (Appeals) also observes that sample copies of the invoices furnished before him were dated either 30.06.2017 or prior to that date, by which the Ld. Commissioner (Appeals) assumes that those invoices had already been issued by the service providers to the appellant. This conclusion appears to be jumping the gun with no documentary evidence on record and nothing on this being alleged to this effect in the Show Cause Notice. This reason, therefore, cannot be sustained.

 

  1. There is also no dispute that the appellant is not found to be ineligible for its refund otherwise; nor are its refund claims found to be wrong. The Revenue has also not suspected the bona fides of the appellant as regards the receipt of service or remitting of Service Tax under reverse charge It is the introduction of the C.G.S.T. Act that prompted the appellant to claim the refund because they were unable to carry it forward, which fact also satisfies the requirements of the second proviso to Section 142 (3) of the C.G.S.T. Act, 2017.

 

  1. In the light of the above discussions, I am of the view that the appellant is entitled to the refund, which is also in line with the decision of the Hon’ble High Court of Judicature at Madras in the case of M/s. 3E Infotech Customs, Excise & Service Tax Appellate Tribunal, Chennai & anor. reported in 2018 (18) G.S.T.L. 410 (Mad.).

 

  1. Accordingly, the appeal is allowed with consequential benefits, if any, as per law.

(Order pronounced in the open court on 20.11.2019)