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2021 (12) TMI 319 - Commissioner - GSTMaintainability of appeal - time limitation - whether the appeal has been filed within the prescribed time- limit? - whether or not the appeal filed against the refund rejection order to be decided are proper? - HELD THAT - In the instant case the order dated 03.11.2020 was received to the appellant on 24.11.2020 first time from the concerned adjudicating authority and the appeal has been filed on 23.02.2021. The appeal has been filed with delay of the normal period prescribed under Section 107(1) of the CGST Act, 2017. It is found that though the delay in filing the appeal is condonable only for a further period of one month provided that the appellant was prevented by sufficient cause from presenting the appeal is shown and the delay of more than one month is not condonable under the provisions of sub section (4) of Section 107 of the Central Goods and Service Tax Act, 2017. With regard to delay in filing of appeal, it is found that the appellant was prevented by sufficient cause from presenting the appeal within the normal period Section 107(1) of the CGST Act, 2017 and further delay of 21 days is condonable under the provisions of sub section (4) of Section 107 of the Central Goods and Service Tax Act, 2017. The appellant in his contention has stated that the provisions for levy of interest u/s 50 of CGST Act has been amended retrospectively vide section 112 of Finance Act, 2021 to provide that the interest on tax shall be payable on net tax liability paid by Electronic Cash Ledger and provisions of Section 112 of the Finance Act, 2021 have been notified to come into force from 01.06.2021 vide Notification No.16/2021-Central Tax dated 01.06.2021. Hence, there is no room left for controversy and the appellant is undoubtedly entitled for refund of interest paid in excess of interest on net tax liability. The appellant was required to pay interest on tax liability paid through Electronic Cash Ledger. However, the appellant before issuance of such instructions and amended provisions to Section 50(1) of the CGST Act, 2017 paid interest on account of delayed payment of tax through Electronic Credit Ledger and Electronic Cash Ledger for the period July-2017 to March-2018 (2017-18) - in consideration of the amended provisions to Section 50(1) of the Act, the interest paid on account of delayed payment of tax through Electronic Credit Ledger by the appellant is in excess of actual interest liability. Hence, the appellant has claimed the refund of such interest paid excessively in addition to his interest liability. There are force in the appellant's contention that the appellant was eligible for refund of interest paid in excess of interest on net tax liability - the impugned order passed by the proper officer/adjudicating authority and allow the appeal of the appellant is set aside - appeal allowed.
Issues Involved:
1. Timeliness of the appeal filing. 2. Legitimacy of the refund claim for interest paid on tax through the Electronic Credit Ledger. Issue-wise Detailed Analysis: 1. Timeliness of the Appeal Filing: The first issue addressed was whether the appeal was filed within the prescribed time limit under Section 107 of the CGST Act, 2017. The order dated 03.11.2020 was received by the appellant on 24.11.2020, and the appeal was filed on 23.02.2021. This resulted in a delay beyond the normal period prescribed under Section 107(1). However, the delay was condonable for a further period of one month if the appellant was prevented by sufficient cause. The delay of 21 days was found to be condonable under Section 107(4), and thus, the appeal was allowed to proceed on merits. 2. Legitimacy of the Refund Claim: The appellant, a proprietorship firm engaged in manufacturing and exports, filed a refund claim for ?4,265/- in interest paid on tax through the Electronic Credit Ledger for the period from July 2017 to March 2018. The claim was initially rejected by the adjudicating authority, citing administrative instructions that did not provide for a refund of interest already paid on ITC. The appellant argued that: - The interest was paid under protest due to unclear provisions regarding whether interest was payable on tax paid through ITC. - The Finance Bill 2021 proposed a retrospective amendment to Section 50 of the CGST Act, effective from July 1, 2017, to charge interest only on net cash liability. - The appellant had followed the directions issued by the government and filed the refund claim accordingly. The adjudicating authority rejected the claim without specifying the section under which the refund was denied, leading to a non-speaking order. Upon review, it was found that: - The appellant had paid interest on both cash and ITC due to late filing of returns. - The retrospective amendment to Section 50(1) of the CGST Act, 2017, effective from July 1, 2017, clarified that interest was payable only on the portion of tax paid through the Electronic Cash Ledger. - The appellant's case did not fall under the exclusion clause of the proviso to Section 50(1). Thus, the appellant was eligible for a refund of the interest paid in excess of the actual interest liability. The adjudicating authority's order was set aside, and the appeal was allowed. The adjudicating authority was instructed to process the refund claim in accordance with the procedures laid down under the CGST Act and rules. Conclusion: The appeal was disposed of by setting aside the impugned order and directing the adjudicating authority to process the refund claim as per the CGST Act and rules.
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