In Kirloskar Toyota Textile Machinery Pvt. Ltd. v. Commissioner of Central Tax, Bengaluru South GST Commissionerate [Central Excise Appeal No. 20320 of 2020 dated August 19, 2021] Kirloskar Toyota Textile Machinery Pvt. Ltd (“the Appellant”) has filed the current Appeal against Order-In-Appeal No. 328/2020 dated June 23, 2020 (“OIA”) which upheld the order of rejection of refund of unutilized education Cess (“EC”) and Secondary and Higher Education Cess (“SHEC”) under Section 140(1) of the Central Goods and Services Tax Act, 2017 (“CGST Act”)
The Appellant contended that accumulated credits of Cesses were not transitioned into Goods and Services Tax (“GST”) regime due to specific restriction under Section 140(1) of the CGST Act. The Appellant therefore had to resort to the option of refund under existing law to avoid lapsing of credit.
Relied on judgments M/s. Bharat Heavy Electricals Ltd. Vs. Commissioner of CGST [ 2020-TIOL-1341-CESTAT-DEL] and The Union Of India v. Slovak India Trading Company [2006 (201) ELT 559 Kar dated July 7, 2006] wherein the appeal was allowed to the assessee on the matter of refund of Cesses.
The Hon’ble CESTAT, Bangalore observed that the decisions relied on by the Appellant are provided by the Division Bench of CESTAT, New Delhi which would prevail over the decision rendered by Single Member of the CESTAT relied on by the Department.
Further noted that the case of Slovak India Trading Company (supra) is bound to be followed which was also relied on in the case of M/s. Bharat Heavy Electricals Ltd. (supra) by holding that the refund of the Cesses can be granted, which couldn’t be transitioned into GST.
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