The court established that transitional CENVAT credit can be carried forward into the GST regime and utilized for claiming refunds under the CGST Act, rejecting hyper-technical interpretations by authorities.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Anand Nainawati for the petitioner and learned advocate Mr. Nikunt K. Raval for the respondents.

2. Rule, returnable forthwith. Learned advocate Mr. Nikunt Raval waives service of notice of rule for and on behalf of the respondents.

3. Having regard to the controversy in narrow compass, with the consent of the learned advocates for the respective parties, the matters are taken up for hearing.

4. Both the petitions are raising common issue and hence, the same are disposed of by this common Judgment and Order.

5. The petitioner has prayed to quash and set aside the Orders-in-Appeal dated 19th February, 2019 passed by the Commissioner (Appeals), CGST & CE, Ahmedabad and the consequential Order-in-Original dated 29th April, 2021 passed by the Additional Commissioner, CGST & Central Excise, Ahemdabad-North and show-cause notice dated 15.10.2020 for giving effect to the Order-in- Appeal.

6. The brief facts of the case are as under.

6.1. The petitioner is engaged in business of manufacture and supply of passenger cars, parts, components and engines thereof. The petitioner also exports goods without payment of Integrated Goods and Services Tax (for short ‘the IGST’) under the Letter of Undertaking (for short ‘the LUT’) in terms of Section 16 of the Integrated Goods and Services Tax Act, 2017 (for short ‘the IGST Act’).

6.2. It is the case of the petitioner that prior to the coming into force the Goods and Service Tax regime, the petitioner was registered under the provisions of the Central Excise Act, 1944 and was discharging appropriate central excise duty on clearance of final products from its factory premises. For use in the manufacture of final products, the petitioner was procuring various inputs and input services with respect to which, the petitioner availed the Central Value Added Tax Credit (for short ‘the CENVAT Credit’) in terms of Central Value Added Tax Credit Rules, 2004.

6.3. Comming into force of the Central Goods and Services Tax Act, 2017 (for short ‘the CGST Act’) with effect from 1st July, 2017, the petitioner was entitled to carry forward the CENVAT Credit of Rs.1,63,15,92,468/- into the GST regime in accordance with Section 140 of the CGST Act read with Rule 117 of the Central Goods and Services Tax Rules, 2017 (for short ‘the CGST Rules’) by filing Form GST TRAN-1 declaration. The petitioner had supplied passenger cars, parts, components and engines to the customers located in India and abroad during the relevant period from July, 2017 to September, 2017 and received various inputs and input services by way of Input Tax Credit (for short ‘the ITC’). The petitioner also filed requisite return in Form GSTR-3B during the relevant period.

6.4. The petitioner availed the ITC for payment of the GST for three months’ period i.e. from July, 2017 to September, 2017 as under:

6.5. For the month of July, 2017, the petitioner had completely utilised the IGST and State GST Credit availed for payment of tax, however, with respect to payment of Central GST liability through available ITC, the petitioner discharged it by utilising available transitional credit.

6.6. For the month of August, 2017, the petitioner completely utilised the IGST Credit availed in the said month for payment of tax and with respect to CGST and SGST liability, the same was discharged through utilisation of ITC pertaining to CGST and S