Case Law Details
Indo Tooling Pvt. Ltd. Vs Commissioner, Central Goods and Service Tax (CESTAT Delhi)
CESTAT finds that payment of service tax including the cess relating to the period prior to 30.06.2017, paid in the year 2018 during the GST regime, amounts to payment in accordance with law as the same has been paid on the insistence by the Department – audit objection. I further find that the demand pursuant to audit is also bad as the appellant was entitled to cenvat credit being a manufacturer of dutiable items, and as such the situation is revenue neutral. Further, the appellant under the erstwhile Cenvat Credit Rules was entitled to cenvat credit of the said amount. Further, in view of the provisions of Section 142(3) of CGST Act, provides that every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of cenvat credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of Section 11B of the Central Excise Act, 1944 (unjust enrichment). Further, Section 142(8)(a) provides that in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under the CGST Act and the amount so recovered shall not be admissible as input tax credit under this Act. Further, sub-section (5) of Section 142 of the CGST Act provides that every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (unjust enrichment).
Thus, from a conjoint reading of sub-section (3), (5) and (8)(a) of the CGST Act, it is evident that an assessee is entitled to claim refund of service tax under RCM paid after the appointed day under the existing law and such claim has to be disposed of according to the provisions of the existing law. As the appellant was entitled to cenvat credit of the said amount of Rs. 9,85,827/-, which is now no longer available due to GST regime, they are entitled to refund of the said amount.
FULL TEXT OF THE CESTAT DELHI ORDER
The issue in this appeal is whether the Court below have rightly rejected the refund claim filed by the appellant for Rs.9,85,827/- relating to the demand of service tax for the period 2012-13 to 2016-17, which was deposited under reverse charge mechanism, pursuant to audit objection, paid on 08.08.2018.
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