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2020 (1) TMI 1280 - Commissioner - GST100% EOU - Refund of accumulated ITC - export of goods services without payment of Integrated tax - export or not - Rejection on the grounds that the appellant did not follow the procedure prescribed in the CBEC circular No. 24/242017-GST dated 21.12.2017 - appellant has contested that the Circular which was taken as the sole base of rejection of the refund application, is not applicable on them being the appellant an EOU and they procured goods from Domestic Tariff Area from the registered dealers after payment of applicable taxes at normal rate - period month of July 2017, August, 2017, September, 2017 and October, 2017. HELD THAT - The circular prescribes the procedure and the, conditions which are to be complied with to get the benefit of deemed export under Section 147 of the GST Act, 2017 which is not the matter involved in the instant matter - Further. vide Para-41 of Circular No.125/44/2019-GST dated 18.11.2019 it is also clarified that the procedure regarding procurement of supplies of goods from DTA by Export Oriented Unit (EOU) / Electronic Hardware Technology Park (EHTP) Unit/ Software Technology Park (STP) Unit/Bio- Technology Parks (BTP) Unit under deemed export as laid down in Circular No.14/14/2017- GST dated 06.11.2017 needs to be complied with. Thus, the appellant was required to follow the procedure as prescribed under Circular No.14/14/2017-GST dated 06.11.2017 mandatorily. Since, the appellant has not followed the procedure under the said circular, they are not entitled for refund - appeal dismissed - decided against appellant.
Issues:
- Appeals filed against rejection of refund claims for accumulated Input Tax Credit (ITC) on export of goods and services without payment of Integrated tax. - Applicability of Circular No. 14/2017 and Circular No. 24/24/2017-GST in the case of an Export Oriented Unit (EOU). - Compliance with procedural requirements for deemed export supplies under Section 147 of the CGST Act, 2017. - Interpretation of Rule 89 of the CGST Rules, 2017 regarding refund claims for deemed export supplies. Analysis: 1. Rejection of Refund Claims: The appellant, a 100% Export Oriented Unit (EOU) engaged in exporting jewelry, filed refund applications for accumulated ITC on export of goods and services without payment of Integrated tax. The adjudicating authority rejected the refund claims citing non-compliance with Circular No. 24/242017-GST dated 21.12.2017, which outlines procedural requirements for deemed export supplies under Section 147 of the CGST Act, 2017. 2. Grounds of Appeal: The appellant contested the rejection of refund claims on the basis that Circular No. 14/2017, which formed the basis of rejection, was not applicable to them as an EOU. They argued that being an EOU, they procured goods from the Domestic Tariff Area (DTA) after paying applicable taxes at normal rates, and the Circular's conditions were not relevant to their situation. 3. Compliance with Circular Requirements: The appellate authority examined the case records and submissions. It noted that the appellant's failure to comply with the Circular's requirements, such as giving prior intimation in a prescribed proforma and obtaining an undertaking from the supplier of deemed export supplies, led to the rejection of refund claims. The Circular mandates specific procedures for deemed export supplies to EOUs, and non-compliance resulted in the denial of refunds. 4. Legal Position and Decision: Rule 89 of the CGST Rules, 2017 allows either the recipient or supplier of deemed export supplies to claim refunds. Circular No. 14/14/2017-GST, dated 06.11.2017, sets out procedures and safeguards for supplies to EOUs. The appellate authority upheld the adjudicating authority's decision, emphasizing that the appellant's failure to adhere to the Circular's requirements meant they were not entitled to refunds. Compliance with Circular No. 14/14/2017-GST was deemed mandatory for EOUs like the appellant. 5. Clarification and Conclusion: Further clarification in Circular No.125/44/2019-GST reiterated the need for compliance with Circular No. 14/14/2017-GST for procurement of supplies from DTA by EOUs. The legal position required the appellant to follow the prescribed procedures strictly, and their non-compliance led to the rejection of refund claims. Consequently, the appeals filed by the appellant were rejected, and the impugned orders were upheld based on the failure to meet the procedural requirements outlined in the Circulars. By analyzing the issues and the detailed judgment, it is evident that the decision was based on the appellant's non-compliance with the Circular's procedural requirements for deemed export supplies, specifically applicable to EOUs like the appellant.
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