2023 (5) TMI 505 - HC - GST

Refund of Input Tax Credit availed on inputs / input services - Export of services - zero rated supply - rejection on the ground that the services provided by the petitioner were intermediary services and did not qualify for export of services - non-furnishing of Foreign Inward Remittance Certificate (FIRC) - Revenue ignored the orders passed by the appellate authority mainly on the ground that it proposes to file an appeal - HELD THAT - Mr. Singla, learned Counsel for the respondent, fairly states that fresh applications for refund or Show Cause Notices would not be necessary, considering that the proceedings emanated from the petitioner filing applications for refund which was culminated in Orders-in-Appeals passed by the appellate authority - Undisputedly, the Revenue is entitled to file an appeal under Section 112 of the CGST Act, however, the said appeal is required to be filed within a period of three months. The said period has been extended as the Appellate Tribunal has not been constituted as yet. It cannot be accepted that the Revenue can ignore the orders passed by the appellate authority mainly on the ground that it proposes to file an appeal - petition allowed.

Summary

Issues involved: Refund of Input Tax Credit for export of services, rejection of refund claims based on nature of services provided and non-furnishing of Foreign Inward Remittance Certificate (FIRC).

Summary:
The petitioner filed a writ petition seeking a direction to implement orders for refund of Input Tax Credit for export of services. The controversy arose when the respondent rejected the refund claims, citing that the services provided were intermediary services and questioning the absence of Foreign Inward Remittance Certificates (FIRCs). The petitioner contended that a consolidated FIRC should suffice for claiming the refund. Appeals were filed against the rejection orders, and the appellate authority allowed the appeals, emphasizing that transaction-wise FIRCs were not feasible for numerous export transactions. The respondent issued Deficiency Memos and Show Cause Notices despite the appellate authority's decision. The court held that the Revenue's insistence on fresh refund applications was unnecessary, and the applications and deficiency memos were deemed invalid. The court directed the respondent to disburse the petitioner's refund claim with interest, noting that the Revenue's right to appeal against the appellate authority's orders remained unaffected.

The court highlighted that the Revenue's entitlement to appeal did not justify ignoring the appellate authority's orders, especially in the absence of a stay order from the Court. The petitioner was granted the refund along with applicable interest, emphasizing the need for timely disbursement. The judgment clarified that the respondent could still pursue statutory remedies against the appellate orders if deemed necessary, ensuring a balance between the parties' rights in the dispute.