Chandigarh, March 17, 2022: In a matter wherein the claim for refund was filed on January 6, 2016 which was returned and again filed on April 19, 2017, the Punjab and Haryana High Court has held that that Section 142 of the Central Goods and Services Tax Act, 2017 when read with Section 2(48) of the Act of 2017 explicitly provides that every claim of refund shall be dealt under the existing law i.e. Central Excise Act, 1944 and not by the provisions of the Act of 2017.
The Division Bench of Justice Ajay Tewari and Justice Pankaj Jain was dealing with an appeal filed against the order passed by Customs, Excise & Services Tax Appellate Tribunal, Chandigarh whereby the respondent was held to be entitled for interest of refund from the date of deposit and the order whereby the application for rectification of mistake filed by the appellant was dismissed.
Essentially, the respondent/Assessee applied for central excise duty along with interest before the Deputy Commissioner, Central Excise, Division Panipat, who by its order allowed and sanctioned refund of Rs.54 lakh to the Assessee however the Assessee’s claim with respect to the interest, was rejected.
Aggrieved, the Assessee filed an appeal against order regarding rejection of interest, before the Commissioner of Central Excise (Appeals), Panchkula which was also dismissed. The Assessee took the matter in appeal before CESTAT, Chandigarh which held the Assessee entitled for interest on delayed refund from the date of deposit till its realization thereof. The Assessee approached the authorities of Panipat Division for refund on February 24, 2020.
While the application was pending before the Authorities at Panipat Division, the Commissioner of CGST and Central Excise, Panchkula filed an application for rectification of mistake before the CESTAT. The said application was also dismissed by the CESTAT. Consequently, the Revenue came in appeal against the aforesaid orders passed by the Tribunal.
Standing Counsel appearing for the Revenue primarily raised question pertaining to the change in jurisdiction of the Authorities after the coming of the new CGST regime. He claimed that with effect from July 1, 2017 the Act of 2017 came into force. The Counsel further claimed that with effect from 22nd June, 2017, the Central Excise Division Panipat, which was earlier under the now dissolved Sonepat (Delhi III) Commissionerate, came under Panchkula Central Excise Commissionerate. Division Sonepat was brought within the jurisdiction of Rohtak Commissionerate. Thus, he claimed that the respondent/Assessee impleaded wrong authorities for claim of refund and interest
Secondly, the Counsel argued that the Tribunal erred in granting interest as per the amended provisions of Section 35FF of the Central Excise Act, 1944.
The Court at the outset held that both the arguments raised by the Counsel needed to be rejected. The Court observed that the Claim for refund in the present case was filed on 6th January, 2016 which was returned and again filed on 19th April, 2017. Further, the Court opined that Section 142 of the Act of 2017 when read with Section 2(48) of the Act of 2017 is a complete answer to the plea raised by the appellant regarding the issue of jurisdiction. The Court also asserted that the provision explicitly provides that every claim of refund shall be dealt under the existing law i.e. Central Excise Act, 1944 and not by the provisions of the Act. Thus, the plea of transfer of jurisdiction due to GST regime was not available to the appellant, adjudged the Court.
Additionally, the Court also asserted that it was not disputed that the provisions of Income Tax Act, 1961 and Central Excise Act, 1944 are pari materia and, therefore, law laid down by the Supreme Court in the case of Sandvik Asia Ltd vs. CIT, Pune 2007 (8) STR 193 (SC) should be applicable to the present case.
Lastly, the Court opined that the Counsel for the appellant was not in a position to deny the proposition of law laid down in Sandvik Asia Ltd’s Case (Supra) and the applicability thereof to the facts of the present case.
Consequently, finding no merit in the present case, the instant appeal was dismissed.