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2021 (8) TMI 318 - Commissioner - GSTTransition/Carry forward of accumulated CENVAT credit of EC and SHEC to GST regime, through TRAN-1 - liability of interest and penalty accrues or not when ITC of Cesses is reversed - HELD THAT:- The unutilised Education Cess and Secondary and Higher Education Cess in the hands of the appellant had become dead CENVAT Credit claim in the year 2015 itself with these levies dropped by the Finance Act 2015 and therefore, there is no question of it being claimed as a right to be carried forward after 01.07.2017 - Since Section 140 was changed retrospectively w.e.f. 01.07.2017 (date of origin of GST) vide CGST (Amendment) Act, 2018 and Explanation 3 of Section 140 was also inserted retrospectively w.e.f. 01.07.2017, which makes it categorical that the transition the CENVAT Credit pertaining to cesses is not allowed and intention of legislature was very clear that these are dead claim and ought not to be transitioned. Thus, the amendment vide Section 140 through CGST Amendment Act, 2018 was done retrospectively w.e.f. 01.07.2017 because transition of cesses was never intended by the legislature. Thus, it is ample clear that carry forward of cesses as ITC through TRAN-1 by the appellant was not proper and in the instant case bounteous statutory provisions are available to restrict admissibility of cesses as ITC in GST to appellant. Whether liability of interest and penalty accrues when ITC of Cesses is reversed, or not? - HELD THAT:- The intention of the Legislature was never to transition the CENVAT Credit pertaining to cesses for the fact that Explanation (3) to Section 140, which barres transition of any cesses, was made effective retrospectively w.e.f. 01.07.2017. Further, reversing the credit pertaining to Ed. Cess and SHE in GSTR-3B for the month of September-2018 does not mean that the appellant became so entitled to carry forward even a dead claim of unutilised Ed. Cess and SHE after 01.07.2017. Hence, once ineligible ITC has been availed interest liability according to Section 50 sticks to anyone - the contention of the appellant regarding non-applicability of interest and penalty after reversing the Cenvat in question is not tenable as per aforesaid statutory provisions the transition of CENVAT Credit pertaining to cesses is not allowed and intention of legislature was very clear that these are dead claim and ought not to be transitioned. Thus, the amendment vide Section 140 through CGST Amendment Act, 2018 was done retrospectively w.e.f. 01.07.2017 because transition of cesses was never intended by the legislature. Appeal disposed off.
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