2021 (8) TMI 931 - Commissioner - GST

Refund of ITC - Zero Rated Supply - export of goods and services at zero rated without payment of Tax under Bond/LUT out of India - HELD THAT - The appellant filed an application for refund of ITC on export of goods and services at zero rated supply made without payment of tax however, the proper officer issued show cause notice (RFD-08) vide reference No.ZO0801200126834 dated 13.01.2020 wherein it has been mentioned that the entire refund claim amount i.e. ₹ 23,12,195/- is inadmissible under other category. In the remark it was directed to submit ITC accumulation documents,invoices etc., and also it was directed to furnish reply within 15 days from the date of service of this notice and appeared before proper officer on 21.01.2020 thereafter, the proper officer/adjudicating authority issued the rejection order in Form GST RFD-06 dated 31.01.2020. The rejection of refund due to non submission of documents and by assuming that claimant has nothing to submit is not proper and justify. There is a provision available under Rule 90(2) to (4) of CGST Rules, 2017 that the refund application shall be scrutinize within a period of fifteen days of filing of the said application by the proper officer, for its completeness and where the application is found to be complete in terms of sub-rule (2) (3) and (4) of Rule 89, an acknowledgement in Form GST RFD-02 shall be made available to the applicant on common portal. Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in Form GST RFD-03 through common portal. The proper officer has not followed the proper procedure before rejecting the refund application of the appellant and appellant was also debar from being heard because of non receiving of the said SCN properly hence, it is demand of justice to examine the refund application on merits - the appellant was eligible for refund of ITC in respect of zero rated supply. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Rejection of refund claim due to non-submission of documents.
2. Technical glitches in the GST portal.
3. Lack of opportunity for the appellant to be heard.
4. Non-receipt of show cause notice and rejection order.
5. Admissibility and calculation of refund claim.

Issue-wise Detailed Analysis:

1. Rejection of Refund Claim Due to Non-submission of Documents:
The appellant, M/s Texrio Textiles Private Limited, filed a refund application under Section 54 of the CGST Act, 2017, for ITC on export of goods and services without payment of tax. The adjudicating authority issued a show cause notice (SCN) stating that the claimant had not submitted details of ITC for which the refund was claimed. Consequently, the refund claim was rejected on the grounds that no response was received to the SCN, and it was assumed that the claimant had nothing to submit, making the refund inadmissible.

2. Technical Glitches in the GST Portal:
The appellant contended that due to technical glitches in the GST portal, the details of the SCN were not available, and they were unaware of the reasons for its issuance. Despite these glitches, the appellant personally approached the department and submitted the required documents via email within the prescribed time. The appellant argued that non-compliance due to technical issues should not be a reason for rejection of the refund application.

3. Lack of Opportunity for the Appellant to be Heard:
The appellant claimed that the refund application was rejected without giving an opportunity to be heard, especially considering the technical issues with the portal. The appellant emphasized that the rejection was unjust as they had complied with the SCN requirements by submitting documents via email.

4. Non-receipt of Show Cause Notice and Rejection Order:
The appellant stated that they did not receive the SCN or the rejection order from the department and were unable to download them from the GST portal. During the personal hearing, the appellant's representative confirmed that they later obtained copies of the SCN and rejection order from the concerned division. The appellant argued that the rejection was improper as they were not given a fair chance to respond due to non-receipt of the SCN.

5. Admissibility and Calculation of Refund Claim:
Upon review, it was found that the proper officer did not follow the correct procedure before rejecting the refund application. The jurisdictional Dy Commissioner verified the refund claim and determined that ?21,85,639/- out of the total ?23,12,195/- was eligible for refund. The calculation was based on the formula prescribed under Rule 89 of the CGST Rules, 2017, considering the lower value between the GST invoice and the shipping bill.

Conclusion:
The appeal was allowed, and the order passed by the adjudicating authority was set aside. The appellant was found eligible for a refund of ?21,85,639/-. The adjudicating authority was directed to process the refund claim in accordance with the CGST Act and rules. The appeal was disposed of in favor of the appellant, ensuring that the refund claim was examined on its merits.