2021 (7) TMI 703 - Commissioner - GST

Refund of Input Tax Credit - rejection mainly on the ground that no reply to SCN has been received till now - assumption taken that claimant has nothing to submit reply in support of the claim - Time limitation - section 54(1) of the CGST Act, 2017 - HELD THAT - The appellant in appeal memo as well as at the time of personal hearing conducted on 18.06.2021 submitted that he had wrongly filed refund application of ₹ 40,64,000/- by including the ITC of IGST on Capital Goods amounting to ₹ 15,02,542/-. However, he is agreed that the refund of ITC pertaining to Capital Goods are not admissible as per provisions of sub rule 4 of Rule 89 of the CGST Rules, 2017 accordingly, he has withdrawn the refund claim to the extent of ITC amount of Capital Goods and requested to pass an order of refund of ITC to the extent of ₹ 25,61,458/-. The appellant has submitted a letter dated 05.03.2020 which was acknowledged by the concerned divisional authority on 16.03.2020 in the instant matter of refund claim for the period April-2018 to March-2019 amounting to ₹ 40,64,000/- under which it has been clearly/explicitly stated by the appellant that they will not go for appeal against the refund rejection made by the adjudicating authority and requested to release the input in their credit ledger so that they may re-apply for the refund after removing deficiencies - the appellant has mis-conceived/mis-leaded the facts while filing of appeal to this office as he has not disclosed the vital facts that he had made a request vide written letter to the proper officer for re-credit of amount to their electronic credit ledger which were debited at the time of filing of refund application by the appellant. The appellant has himself forfeited his right to file the appeal before Appellate Authority by submitting an undertaking before the adjudicating authority/proper officer as per explanation given under Rule 93 (2) of CGST Rules, 2017 - the instant appeal is non maintainable - Appeal dismissed.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Time-barred refund application.
3. Wrong claim of Input Tax Credit (ITC).
4. Undertaking not to file an appeal.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The appellant filed the appeal with a delay of 201 days from the normal period prescribed under Section 107(1) of the CGST Act, 2017. The appellant argued that the delay was due to the late receipt of the certified copy of the impugned order and cited the Hon'ble Supreme Court's judgment extending the period of limitation due to the COVID-19 pandemic. The appellate authority condoned the delay, considering the pandemic situation and relevant notifications issued by the CBIC extending the time limits for various compliances.

2. Time-barred Refund Application:
The appellant claimed that the refund application was filed within the two-year period prescribed under Section 54(1) of the CGST Act, 2017. The adjudicating authority rejected the refund claim on the ground that no reply to the show cause notice was received, assuming that the claimant had nothing to submit. The appellant contended that the refund application was not time-barred and was filed within the prescribed period, making the order erroneous and illegal.

3. Wrong Claim of Input Tax Credit (ITC):
The refund claim included ITC of IGST on capital goods amounting to ?15,02,542/-, which the appellant admitted was inadmissible as per sub-rule 4 of Rule 89 of the CGST Rules, 2017. During the personal hearing, the appellant agreed to withdraw the refund claim to the extent of the ITC amount on capital goods and requested a refund of the remaining eligible ITC amount of ?25,61,458/-.

4. Undertaking Not to File an Appeal:
The appellant had submitted an undertaking to the proper officer that they would not file an appeal against the refund rejection and requested the re-credit of the rejected amount to their electronic credit ledger. The proper officer re-credited the amount through Form PMT-03 as per Rule 93(2) of the CGST Rules, 2017. The appellate authority found that the appellant had forfeited the right to file an appeal by submitting this undertaking, making the appeal non-maintainable.

Conclusion:
The appellate authority concluded that the appellant misled the facts while filing the appeal and had forfeited the right to appeal by submitting an undertaking not to file an appeal. Consequently, the appeal was rejected without going into the merits of the case, and the order passed by the adjudicating authority was upheld. The appeal was disposed of accordingly.