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2022 (12) TMI 1454 - Commissioner - GSTRefund of IGST - Rejection on the ground that Appellant had not made any excess payment of GST in the instant case - time limitation - rejection also on the ground that refund claim had been filed beyond the prescribed period of 2 years and hence, the same was time barred. Whether the refund application dated 08.09.2021 is time barred or not? - HELD THAT - The refund to be filed in terms of the provisions contained in Section 54 of CGST Act, 2017 which provides that any person claiming refund of any tax and interest, if any, paid on such tax any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Further, Clause (e) to Explanation 2 of Section 54 defines relevant date for the purpose of filing refund application under inverted duty structure as the due date for furnishing of return under section 39 for the period in which such claim for refund arises. The adjudicating authority has calculated the relevant date in accordance with law and the refund application filed by the appellant was beyond the prescribed time limit. Hon'ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2022 (1) TMI 385 - SC ORDER has extended the period of limitation excluding the period from 15.03.2020 to 28.02.2022 (lockdown period) - during pendency of this appeal before this office, CBIC vide Notification No. 13/2022-Central Tax dated 05.07.2022 has excluded the period from 01.03.2020 to 28.02.2022 for computation of period of limitation for filing refund application under section 54 or section 55 of the said Act. Thus, refund application in the present case has been filed on 08.09.2021 is within time extended by the Hon'ble Apex Court and CBIC. And the order of the adjudicating authority is liable to be set aside. Whether the party has paid excess payment, which has to be refunded or not? - HELD THAT - The adjudicating authority held that there appears to be no excess payment made by the party. The adjudicating authority did not mention any valid justification about the decision made that there appears to be no excess payment . The same reply has been submitted by the Assistant Commissioner, CGST Division Panchkula, vide its letter dated 17.10.2022 - thus, neither any calculation any reconciliation has been provided with the O-I-O dated 26.10.2021 - the appellant has paid an amount of Rs. 74,423/- under reverse charge on account of Ocean Freight. The entry of the said amount has been duly made in the Electric Credit Ledger on dated 18.04.2022. The appellant vide their explanation letter dated 17.11.2022 clarified that out of 74,423/-, Rs. 41,870/- was paid through Challan dated 18.04.2019 and balance amount of 32,553/- was paid vide cash deposited in the form of TCS. The levy of IGST on struck down by Supreme Court in case of UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR 2022 (5) TMI 968 - SUPREME COURT , on the grounds that such levy created a double taxation and is violation of principles of composite supply under Section 2 (30) read with section 8 of the CGST Act. The payment made against the Entry ID of the Notification No. 10/2017 Integrated Tax (Rate) dated 28th June 2017, was not required to pay by the appellant, hence the amount so paid Rs. 74,423/- (reverse charge), is available to be refunded to the appellant. Refund allowed - appeal allowed,
Issues Involved:
1. Whether the refund application dated 08.09.2021 is time-barred. 2. Whether the party has paid excess payment, which has to be refunded. Issue-wise Analysis: 1. Whether the refund application dated 08.09.2021 is time-barred: The adjudicating authority initially rejected the refund claim on the grounds that the application was filed beyond the prescribed time limit of two years as stipulated under Section 54 of the CGST Act, 2017. The relevant date for filing the refund application was determined as the due date for furnishing the return under Section 39 for the period in which the claim for refund arises. The adjudicating authority calculated that the refund application was filed beyond this prescribed time limit. However, the Supreme Court extended the period of limitation excluding the period from 15.03.2020 to 28.02.2022 due to the COVID-19 pandemic. This extension was clarified by the CBIC in Circular No. 157/13/2021-GST dated 20.07.2021, which stated that the extension of timelines granted by the Supreme Court was not applicable to any other proceedings under GST Laws except for appeals. Subsequently, CBIC issued Notification No. 13/2022-Central Tax dated 05.07.2022, excluding the period from 01.03.2020 to 28.02.2022 for the computation of the period of limitation for filing refund applications under Section 54 or Section 55 of the CGST Act. Given this extension, the appellate authority found that the refund application filed on 08.09.2021 was within the extended time frame provided by the Supreme Court and CBIC. Therefore, the adjudicating authority's order was set aside, and the refund application was deemed to be filed within the allowable period. 2. Whether the party has paid excess payment, which has to be refunded: The appellant argued that the amount of IGST paid under reverse charge mechanism (RCM) for ocean freight charges was in excess and should be considered a deposit rather than a tax. They contended that they were not the 'recipient' of the service as defined under Section 2(93) of the CGST Act, and thus, were not liable to pay GST under RCM on ocean freight charges. The appellant supported their claim with the Gujarat High Court's judgment in the case of Mohit Minerals Private Limited v. UOI, which held the levy of IGST on ocean freight charges as unconstitutional and ultra vires the IGST Act. The adjudicating authority did not provide any valid justification for their decision that there was no excess payment made by the appellant. The appellate authority noted that the appellant had paid Rs. 74,423/- under reverse charge for ocean freight, out of which Rs. 68,538/- was availed as Input Tax Credit (ITC), leaving a balance of Rs. 5,885/- which was not available as ITC. The appellate authority agreed with the appellant's submission that the levy of IGST on ocean freight was struck down by the Supreme Court in the case of UOI vs. Mohit Minerals Pvt. Ltd., as it created double taxation and violated the principles of composite supply under Section 2(30) read with Section 8 of the CGST Act. Therefore, the payment made against the Entry 10 of Notification No. 10/2017-Integrated Tax (Rate) dated 28th June 2017 was not required, and the amount of Rs. 5,885/- was liable to be refunded to the appellant. Conclusion: The appellate authority allowed the appeal, setting aside the adjudicating authority's order and granting the refund claim amounting to Rs. 5,885/- to the appellant. The decision was based on the extension of the limitation period due to the COVID-19 pandemic and the unconstitutionality of the IGST levy on ocean freight charges.
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