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Since, the appellant was not entitled to avail the credit therefore, were not entitled to transfer the said credit in TRAN-1 as ITC, however the penalty imposed under the provisions of Section 122(2) of the CGST Act as there was no intention to evade tax

Transitional credit— In the instant case, The appellant is engaged in supply of taxable service under the category of Goods Transport Agency Service, appeared to have wrongly availed the input tax credit of Cenvat credit taken in GST TRAN-1 as ITC with regard to Input Service of GTA under RCM paid on 6-7-2017 under head 7(b) of TRAN-1 which was not shown in ST-3 return ending on June, 2017 in contravention of Section 140(1) of the CGST Act, 2017 read with Rule 117 of the CGST Rules, 2017. Thus, they have wrongly taken the input service credit of Rs. 2,32,334/- which is liable to be recovered in terms of the provisions of Section 73(1) of the CGST Act, 2017 and also liable for penal action under Section 73(1) read with Section 122(2) of the CGST Act, 2017. Since, the appellant was not entitled to avail the credit in the month of June, 2017 they were not having any Cenvat credit balance legally in their return before the appointed day, therefore, were not entitled to transfer the said credit in Table 5(a) of TRAN-1 as ITC and was not in accordance with the transitional provision of Section 141(1) of CGST Act, 2017 and rightly disallowed by the adjudicating authority. The appellant has stated that issues are primarily relating to procedural violation and was unintentional due to provisions being new, lack of knowledge and such lapses are ought to occur during the initial phase of new law. I also find that GST being a new law such lapses are ought to occur during the initial phase but it should not be with intent to evade tax. I do not find such intention in the present case therefore, I set aside the penalty imposed under the provisions of Section 122(2) of the CGST Act, 2017. Held that— upheld the order to the extent of disallowance of ITC and set aside the penalty imposed under Section 122(2) of the CGST Act, 2017.