SECTION 182 CLAIM OF CENVAT CREDIT TO BE DISPOSED OF UNDER THE EARLIER LAW<\/strong><\/span><\/h3>\n

It is provided in sub-section (1) that every proceeding of appeal, revision, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day, under the earlier law shall be disposed of in accordance with the provisions of earlier law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of earlier law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and shall not be admissible as input tax credit under this Act. This provision can be explained with the help of an example regarding credit admissibility on capital goods. If we observe the definition of capital goods given under revised GST Law, we find that it is very wide wherein every goods whose value has been capitalised in the books of accounts to be used in business are considered as capital goods whereas the Cenvat Credit Rules, 2004 provides a restrictive definition of capital goods. The above provision will debar assessees from taking reference of Revised GST Law for matters pertaining to earlier law. However, the provision regarding refund of credit found to be admissible under earlier law will definitely increase compliance cost of assessees as it is extremely difficult to claim refund under indirect taxation. Furthermore, it is also specifically mentioned that the provisions of sub-section (2) of section 11B, pertaining to unjust enrichment will also apply thereby diminishing the possibility of grant of refund to assessees. This is for the reason that in case of refund of cenvat credit, it will be very difficult for assessee to prove that the burden of duty has not been passed on by the assessee. As such, the government will enrich at the cost of assessee even if it is decided that the assessee is admissible for credit because it is provided that credit will be allowed only by way of refund which is very difficult to claim. In this context, reference may be made to the Supreme Court decision in the case of COMMISSIONER OF CENTRAL EXCISE, MADRAS VERSUS M\/S ADDISON & CO. LTD. [2016-TIOL-146-SC-CX-LB]<\/em><\/strong> wherein it was held that the principle of unjust enrichment is to be seen till the ultimate buyer of goods and is not limited to the immediate buyer of goods.<\/span><\/p>\n

The proviso to sub-section (1) further clarifies that no refund claim shall be allowed of any amount of Cenvat credit where the balance of the said amount as on the appointed day has been carried forward under this Act. This provision has been incorporated to ensure that the assessee does not take double benefit for the same credit.<\/span><\/p>\n

The sub-section (2) provides that every proceeding of appeal, revision, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day, under the earlier law shall be disposed of in accordance with the provisions of earlier law, and if any amount of credit becomes recoverable as a result of appeal, revision, review or reference, the same shall be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act. It is not understandable as to why the provision regarding non-admissibility of input tax credit has been incorporated because it is not the case of recovery of duty but it is the case of recovery of credit. When credit has been considered as non-admissible, why will assessee claim the credit again.<\/span><\/p>\n

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SECTION 182 CLAIM OF CENVAT CREDIT TO BE DISPOSED OF UNDER THE EARLIER LAW It is provided in sub-section (1) that every proceeding of appeal, revision, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day, under the earlier law shall be disposed of in accordance … Read more<\/a><\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[457],"class_list":["post-3777","post","type-post","status-publish","format-standard","hentry","category-gst","tag-gst-transitional-provisions"],"yoast_head":"\n