The Mumbai bench of Customs, Excise & Service Tax Appellate Tribunal has set asides denial to avail CENVAT credit on service tax paid during GST regime under Reverse Charge Mechanism.
The appellant, M/s Brose India Automotive Systems Pvt. Ltd. has paid service tax during GST regime under Reverse Charge Mechanism on import of services. Refund application was filed within the limitation period of one year in terms of Section 11B of Central Excise Act, 1944 seeking refund of service tax. After the onset of GST regime, it could not avail the credit and the appellant sought cash refund by invoking protection granted under Section 174 and 142 of the CGST Act, 2017.
The adjudicating authorityrejected the refund application on the ground that GST was payable on the recorded transactions since final booking was made in the books of account during GST regimethough service had been rendered during pre GST regime i.e. prior to July, 2017. The Commissioner (Appeals) confirmed the order and hence, the appellant filed appeal before the CESTAT.
The counsel for the appellant Sri S. Narayanan, submitted that appellant was eligible to avail credit of Service Tax paid as input services were used for manufacturing activity. Since carrying forward of CENVAT credit to GST regime had expired on 27.12.2017 and there was no other alternative except to get the CENVAT credit in cash as contemplatedunder Section 142(3) of the CGST Act.
The Tribunal observed that Clause 2(f) of Section 174 of CGST Act clearly state that any proceedingincluding an appeal if filed after the appointed day under the Repealed Act also, the same shall be continued under the said Act as if GST Act has not come into force and the previous Act has not been amended or Repealed.
The single bench presided by Dr. Suvendu Kumar Pati, Member (Judicial) while allowing the appeal has held that “appellant is entitled to get refund of CENVAT credits against which payment of Service Tax was made during the GST regime and accepted by the Respondent-Department. The Respondent-Department is directed to pay the refund amount of Rs.18,43,422/- alongwith applicable interest within three months of receipt of this order”. To Read the full text of the Order CLICK HERE
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