Case Law Details

Case Name : MSYS Tech India Private Limited Vs Commissioner of GST & CE (Appeals-II) (CESTAT Chennai)
Appeal Number : Service Tax Appeal No. 41797 of 2019 -SM
Date of Judgement/Order : 20/02/2020
Related Assessment Year :
Courts : All CESTAT (1010) CESTAT Chennai (138)

MSYS Tech India Private Limited Vs Commissioner of GST & CE (CESTAT Chennai)

Refund of input Cenvat credit cannot be denied for mere non-registration of premises

Hon’ble High Court of Judicature at Madras has held that the refund of input Cenvat credit cannot be denied just because premises was unregistered, in the case of Commissioner of GST & Central Excise, Chennai Vs. BNP Paribas Sundaram Global Securities, in CMA No. 57 of 2018 dated 18.01.2018. Therefore, the denial of refund for the reasons of a premises being un­registered cannot sustain and the same is set aside.

Refund of input Cenvat credit of pre GST regime claimed on or after 01.07.2017 cannot be denied for not debiting Cenvat Credit Account

Refund of input Cenvat credit of pre GST regime on the ground that the amount claimed as refund was not debited from the appellant’s Cenvat Credit Account at the time of filing the claim. The appellant having failed in its endeavour to convince the First Appellate Authority, has filed the present appeal before this forum.

Wth the introduction of GST there was a change in the scenario, there was also no provision in the ACES system to debit the refund amount and that subsequent reversal by the appellant in its GSTR-3B file is a sufficient compliance with condition at paragraph 2(h) of Notification No. 27/2012-CE (NT) dated 18.06.2012. This aspect has also been clarified by the CBIC in its Circular No. 58/32/2018-GST dated 04.09.2018.

FULL TEXT OF THE CESTAT JUDGEMENT

By this appeal, the assessee-appellant is challenging the denial of refund of un-utilized input Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004 (CCR for short). The appellant, a provider of ‘Information Technology Services’ to its foreign clients, filed a refund claim of service tax paid on input services, of an amount of Rs. 8,07,955/- for the period April, 2017 to June, 2017. A Show Cause Notice dated 19.02.2019 was issued proposing to restrict the refund claim to Rs. 1,36,458/- on the allegations that the appellant had claimed certain ineligible input Cenvat credit. The  adjudicating authority after considering the explanation filed by the assessee dated 06.03.2019, firstly considered certain services as ineligible since those services were rendered at an unregistered premises, then re-determined the export turnover and total turnover but finally, proceeded to reject the entire refund claim of the assessee, on the ground that the amount claimed as refund was not debited from the appellant’s Cenvat Credit Account at the time of filing the claim. The appellant having failed in its endeavour to convince the First Appellate Authority, has filed the present appeal before this forum.

2. Heard Shri A.S. Hariharakumar, Learned Consultant, for the assessee-appellant and Shri M. Jagan Babu, Learned Departmental Representative, for the Revenue, I have gone through the documents placed on record and also the decisions relied on by the appellant. The availability of input credit as regards the services rendered at un-registered premises, is fairly settled and even the Hon’ble High Court of Judicature at Madras has held that the refund of input Cenvat credit cannot be denied just because premises was unregistered, in the case of Commissioner of GST & Central Excise, Chennai Vs. BNP Paribas Sundaram Global Securities, in CMA No. 57 of 2018 dated 18.01.2018. Therefore, the denial of refund for the reasons of a premises being un­registered cannot sustain and the same is set aside.

3. The period involved is April, 2017 to June, 2017 and the refund claim was made in June, 2018, which is perhaps within the period of one year but, however, by that time it is an undisputed fact that the GST regime had taken over by which filing of ST-3 Return was done-away. There is also no denial by the Revenue as to the claim of the appellant that subsequent to the filing of TRAN-1 Return, the refund amount was debited in its GSTR-3B/Electronic Credit Ledger. In this regard, I find that the decisions relied upon by the Learned Consultant on the following cases namely:-

1. Inductoterm Group Pune (P) Ltd., Vs. C.S.T. (Order Nos. A/88468-88971/2017/SMB dated 3.7.2017)

2. Sandoz (P) Ltd., Vs. C.C.E (Order Nos. A/31180-3019/2015-WZB/EB dated 13.08.2015)

3. Kopran Ltd. Vs. CCE (Order No. A/862018/2016/EB dated 26.2.2018 (Order No. A/86808/2016/EB dated 26.02.2018)

4. Kellogg and Andelson Management Service (P) Ltd. Vs. CST (Order Nos. 41697-41702/2018 dated 23.05.2018).

are apt. The common takeaway from the above decisions is that with the introduction of GST there was a change in the scenario, there was also no provision in the ACES system to debit the refund amount and that subsequent reversal by the appellant in its GSTR-3B file is a sufficient compliance with condition at paragraph 2(h) of Notification No. 27/2012-CE (NT) dated 18.06.2012. This aspect has also been clarified by the CBIC in its Circular No. 58/32/2018-GST dated 04.09.2018.

4. In view of the above, I am of the considered opinion that the denial of refund is not in accordance with law and hence the impugned order cannot sustain. The same is accordingly set aside, appeal is allowed with consequential benefits, if any, as per law.

(Order pronounced in the Open Court on 20.02.2020)

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