Section 140 of the CGST Act, 2017 —Transitional Credit -– The Revenue department challenged the order passed by the Commissioner of Appeals to the extent that the appellate authority has declined the Revenue’s demand pertaining to a sum of Rs. 2,18,75,232/- for which undue credit, was obtained by the respondent assessee. The matter pertains to the period of transition in 2017. The respondent made payment of service tax component pertaining to manpower and the like services long after the appointed date of July 1, 2017 and claimed cenvat credit. The department issued SCN dated July 31, 2019 on the ground that since such payment of service tax was not made prior to the appointed date and could not have been reflected in the electronic ledger account maintained, in terms of Section 140. The order-in-original of June 18, 2020 upheld the Revenue’s demand on such count. The court observed that the eligibility to obtain cenvat credit depends on what is indicated in the return and, as long as the return is in order, the cenvat credit cannot be denied. There is no dispute in this case that the return filed was in order. The eligibility or entitlement to obtain cenvat credit, in terms of Section 140(1), is based on whether the matter is reflected in the return which is filed as per the existing law in the manner prescribed; and not on when the return was filed or whether the duty or tax for which cenvat credit is claimed had been deposited prior to the appointed date. The Revenue’s limited challenge to the appellate order fails.

Held that:- The Hon’ble High Court found the appellate order in such regard to be unexceptionable and the petition is without merit and dismissed the same.