2019 (12) TMI 1345 - Commissioner - GST

Refund of unutilized ITC - Rejection on the ground that the appellant had already debited the entire ITC of inputs in their electronic ledger that had been claimed in the refunds claims and some amount out of that amount, were rejected by the adjudicating authority - month of July 2017, August, 2017, September, 2017, October, 2017 and November, 2017 separately - Rule 93 as well as Circular 17/17/2017 - HELD THAT - The adjudicating authority was required to allow the re-credit of the amount already debited to the extent of rejection, but the adjudicating authority has not allowed the re-credit. The provisions do not stipulate that in the case of non submission of invoices etc., the re-credit should not be allowed. Thus, the impugned order to the extent of not allowing the re-credit of the amount already debited by the appellant, to the extent of rejection without allowing the proper opportunity to present his case is not legally correct and therefore, the impugned orders is set aside to that extent and direct the adjudicating authority to allow the appellant to present his case regarding not allowing re-credit of the amount already debited to the extent of rejection - Further, the department is free to take appropriate action as per law to recover the ITC of inputs if the appellant had availed ITC on inputs without having proper documents/invoices etc. Recovery of excess amounts sanctioned provisionally for the refund claim file for the month September, 2017 and October, 2017 - appellant has contested that amount cannot be recovered when the re-credit was admissible - HELD THAT - The contention of the appellant is not acceptable as sanction of refund in cash and allowing of re-credit in the electronic register cannot be considered as same thing. Since, the amount was excess sanctioned in cash; the same is recoverable in cash along with interest. However, the re-credit to the appellant is admissible. Appeals disposed off.

Summary

Issues Involved:
1. Rejection of refund claims for unutilized Input Tax Credit (ITC).
2. Non-allowance of re-credit of rejected refund amounts.
3. Recovery of excess amounts sanctioned provisionally.

Issue-wise Detailed Analysis:

1. Rejection of Refund Claims for Unutilized ITC:
The appellant filed applications for refund of unutilized ITC for July, August, September, October, and November 2017. The adjudicating authority sanctioned partial refunds and rejected certain amounts due to the appellant's failure to provide necessary ITC invoices/documents. The appellant contested that Rule 93 and Circular 17/17/2017 mandate the re-credit of rejected amounts, which the adjudicating authority did not follow.

2. Non-allowance of Re-credit of Rejected Refund Amounts:
In all six appeals, the main issue was whether re-credit of ITC of inputs should be allowed to the extent the refund claims were rejected. The adjudicating authority did not allow re-credit, citing non-submission of ITC invoices/documents. The appellant argued that Rule 93 and Circular 17/17/2017 require re-credit of rejected amounts via Form PMT-03 and RFD-01B. The adjudicating authority's refusal to allow re-credit without proper opportunity for the appellant to present their case was deemed legally incorrect. The judgment directed the adjudicating authority to allow the appellant to present their case regarding the re-credit of the amount already debited to the extent of rejection.

3. Recovery of Excess Amounts Sanctioned Provisionally:
For the months of September and October 2017, the adjudicating authority ordered the recovery of ?1,45,786 and ?8,138, respectively, due to excess amounts sanctioned provisionally. The appellant argued that recovery should not occur when re-credit was admissible. However, the judgment clarified that sanction of refund in cash and re-credit in the electronic register are not the same. Excess sanctioned amounts in cash are recoverable along with interest, but re-credit to the appellant is admissible.

Conclusion:
The judgment set aside the impugned orders to the extent of not allowing re-credit of the amount already debited by the appellant to the extent of rejection. The adjudicating authority was directed to allow the appellant to present their case regarding re-credit. The department was permitted to take appropriate action to recover ITC if the appellant availed ITC without proper documents. The recovery of excess amounts sanctioned provisionally was upheld, but re-credit to the appellant was deemed admissible. The six appeals were disposed of accordingly.