GSTAT Thane Bench Holds It Lacks Jurisdiction Over Refund Appeals Under Section 142(3) CGST Act; Directs Revenue to Approach CESTAT

The Goods and Services Tax Appellate Tribunal (GSTAT), Thane Bench, has ruled that it does not have jurisdiction to entertain appeals relating to the refund of unutilised cenvat credit under Section 142(3) of the Central Goods and Services Tax (CGST) Act, 2017. The Tribunal dismissed the revenue’s appeal as not maintainable, granting liberty to approach the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) as the appropriate forum.

Background

The appeal was filed by the Commissioner, CGST & C. Ex., Raigad Commissionerate, challenging orders passed under the erstwhile Central Excise Act, 1944 read with the Cenvat Credit Rules, 2004. The respondent, Kairav Chemofarbe Industries Ltd., had claimed a refund of accumulated and unutilised cenvat credit in cash under Section 11B of the Central Excise Act, 1944, as permitted by Section 142(3) of the CGST Act, 2017.

Core Issue

The central question before the GSTAT was whether an appeal concerning the refund of unutilised cenvat credit, availed under the erstwhile Cenvat Credit Rules and processed in terms of Section 142(3) of the CGST Act, 2017, lies before the GSTAT or another forum.

Submissions and Context

The revenue argued that since the issue pertained to a refund under Section 142(3) of the CGST Act, the GSTAT was the correct appellate forum. In contrast, the respondent contended that both the adjudicating and first appellate orders were passed under the Central Excise Act, 1944, and the impugned order itself directed that any appeal should be filed before CESTAT, not GSTAT.

Reasoning and Legal Analysis

The Tribunal examined the statutory framework, noting that Section 142(3) of the CGST Act provides for the disposal of refund claims in accordance with the provisions of the existing law, specifically Section 11B of the Central Excise Act, 1944. The Tribunal observed that both the original and first appellate orders were passed under the Central Excise Act, 1944, and not under the CGST Act per se.

The Bench referred to the decision of the CESTAT Larger Bench in M/s. Bosch Electrical Drive India Pvt. Ltd. v. Commissioner of Central Tax, Chennai, which held that appeals against refund or credit rejection orders passed under Section 142(3) of the CGST Act, 2017 are maintainable before CESTAT, not GSTAT.

Final Ruling and Directions

Based on the statutory provisions and judicial precedent, the GSTAT Thane Bench concluded that it lacked jurisdiction to entertain the present appeal. The Tribunal dismissed the revenue’s appeal as not maintainable before it, while expressly granting liberty to the revenue to approach the appropriate forum, namely CESTAT, for further adjudication in accordance with law.

This decision clarifies the appellate forum for disputes concerning refunds of unutilised cenvat credit processed under Section 142(3) of the CGST Act, reinforcing that such matters must be pursued before CESTAT and not GSTAT.