Service tax refund cannot be denied: CESTAT

Service tax refund cannot be denied: CESTAT

GST Act cannot frustrate procedural requirement of filing TRAN-1 before December 27, 2017

The Chennai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the right to claim service tax refund cannot be frustrated for the procedural requirement of filing TRAN-1 before December 27, 2017.

The appellant, Bharat Heavy Electricals is engaged in the manufacturing of boiler auxiliaries. These include electrostatic precipitator, air preheaters and fans, registered with the Central Excise Department. Being service providers and recipients of services, after the introduction of the Goods and Services (GST) Act, the company obtained the necessary registration.

The appellant contended that the GST department had no case that the credit availed by it for which refund claim was filed was ineligible. By merely stating that the appellant had not availed the credit and carried forward to the GST regime by filing TRAN-1, the refund claim was rejected. It was stated that the time for filing such TRAN-1 had expired.

The Coram of the judicial member, Sulekha Beevi C S held that the appellant would be eligible to avail credit even after the introduction of the GST law. She ruled that the right of the appellant could not be frustrated by pressing on the procedural requirement of filing TRAN-1 before the required date.

"There is no allegation raised by the department that the appellant is not eligible to avail credit of the duties/taxes paid on such services. The appellant would be eligible to avail of the credit but for the introduction of the new GST law. It is also explained by the appellant that it availed the credit only after making full payments to the vendors," the CESTAT added.