The Goods and Services Tax Appellate Tribunal (GSTAT), Thane Bench, has clarified that appeals arising from refund claims of accumulated and unutilised CENVAT credit under Section 142(3) of the Central Goods and Services Tax (CGST) Act, 2017 are not maintainable before the GST Appellate Tribunal if the original proceedings were decided under the erstwhile Central Excise Act, 1944.
Holding that the proper appellate forum is the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), the Bench of Justice Ramesh Nair (Judicial Member) and Prallhad S. Paranjape (Technical Member) dismissed the department’s appeal for lack of jurisdiction while granting liberty to approach the appropriate forum.
The dispute arose from a refund claim relating to accumulated and unutilised CENVAT credit. The taxpayer had sought cash refund under Section 11B of the Central Excise Act, 1944, read with Section 142(3) of the CGST Act, 2017, which governs transitional refund claims after the implementation of GST. The adjudicating authority’s order was challenged before the first appellate authority, which ruled in favour of the taxpayer by setting aside the Order-in-Original. Aggrieved by this outcome, the Revenue preferred an appeal before the GST Appellate Tribunal.
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The principal question before the Tribunal was whether an appeal involving refund of unutilised CENVAT credit claimed under Section 142(3) of the CGST Act should be heard by the GST Appellate Tribunal or by the CESTAT.
The department argued that since the refund was claimed under Section 142(3) of the CGST Act, the GSTAT possessed jurisdiction to entertain the appeal. Conversely, the taxpayer contended that both the original adjudication and the first appellate order had been passed under the Central Excise Act, 1944, and therefore any further appeal could lie only before the CESTAT. The taxpayer also pointed out that the appellate order itself indicated CESTAT as the appropriate appellate forum.
The GSTAT observed that although Section 142(3) of the CGST Act provides for disposal of transitional refund claims after the advent of GST, it expressly mandates that such claims be decided in accordance with the provisions of the “existing law.” In the present case, the governing law remained Section 11B of the Central Excise Act, 1944.
The Bench held that merely because the refund provision is referenced in Section 142(3) of the CGST Act does not transform the proceedings into proceedings under the GST enactment. Since the adjudication continued to be governed by the Central Excise Act, the appellate remedy also remained under the pre-GST legal framework.
The Tribunal relied on the Larger Bench decision of the CESTAT in M/s. Bosch Electrical Drive India Pvt. Ltd. v. Commissioner of Central Tax, Chennai, reported in 2024 (390) E.L.T. 652 (Tri.-LB). That judgment had authoritatively held that appeals arising from refund or credit rejection orders passed under Section 142(3) of the CGST Act are maintainable before the CESTAT.
The GSTAT concluded that it lacked jurisdiction to entertain the department’s appeal.
The Tribunal dismissed the Revenue’s appeal as not maintainable, holding that the proper forum for challenging the appellate order is the CESTAT. At the same time, it granted liberty to the Revenue to approach the appropriate appellate forum, where the matter would be considered in accordance with law.
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