Ms Rungta Mines Limited Represented Through Its Director Sri Ashutosh Mohanty vs. The Commissioner Of Central Goods And Services Tax And Central Excise

Held

The Court held that the petitioner was not entitled to the refund of CENVAT credit. The Court found that the petitioner failed to claim the CENVAT credit within the prescribed time under the existing law, specifically in their ER-1 return. The delay in receiving the original invoice was attributed to the petitioner and their service provider, not the revenue authorities. Furthermore, the Court noted that the petitioner illegally claimed the credit in their ST-3 return, as they were not registered as a service provider and were only liable to pay service tax under the reverse charge mechanism. The Court also observed that the services were not utilized for export, rendering them ineligible for refund under the existing law. Consequently, the petitioner did not have an existing right to claim a refund on the date the CGST Act came into force. The Court found no reason to interfere with the orders of the adjudicating and appellate authorities, holding that the impugned orders were well-reasoned.

Facts

The petitioner, M/s Rungta Mines Limited, sought to set aside orders rejecting its refund application for CENVAT credit of Rs. 10,88,328/-. This amount represented service tax paid on 'Port Services' availed for importing coal between April 26-29, 2017. The bill for these services was raised on May 23, 2017, but the original was received by the petitioner only on September 20, 2017, after the GST regime commenced on July 1, 2017. The petitioner filed its ER-1 return for June 2017 on July 10, 2017, and revised it on July 30, 2017, without claiming the credit due to non-receipt of the original bill. The ST-3 return for April-June 2017 was filed on September 22, 2017, where the credit was disclosed. The refund application was filed on June 28, 2018, which was rejected by the adjudicating authority and upheld by the appellate authority.

Key Issues

1. Whether the petitioner is entitled to claim CENVAT credit of service tax paid on 'Port Services' under the transitional provisions of Section 142(3) of the CGST Act, 2017, read with Section 11-B of the Central Excise Act, 1944, and Rule 2(l) and Rule 3 of the CENVAT Credit Rules, 2004, despite the delay in receiving the original invoice and the subsequent introduction of the GST regime? Petitioner's arguments: The petitioner contended that Section 140 of the CGST Act, read with Rule 117 of the CGST Rules, provides a mechanism for claiming transitional credit. They argued that the delay in receiving the original bill was beyond their control and that they had disclosed the credit in their ST-3 return to safeguard their claim. They also relied on Section 11-B of the Central Excise Act for refund claims and Section 142(3) of the CGST Act for refunds of duties and taxes paid under the existing laws. Revenue's arguments: The revenue argued that the petitioner failed to claim the CENVAT credit within the prescribed time under the existing law and did not claim transitional credit through TRAN-1. They further contended that the petitioner illegally claimed the credit in their ST-3 return, as they were registered only for reverse charge mechanism and not as a service provider. The revenue also argued that the services were not utilized for export, making them ineligible for refund under the existing law. The delay in receiving the invoice was an inter-se issue between the petitioner and the port authority, not attributable to the revenue authorities.