2022 (1) TMI 696 - Commissioner - GST

Seeking condonation of delay in filing Refund claim - both appeals filed on 14-12-2020, being delay of 18 days and 20 days from the normal period prescribed under Section 107(1) of the CGST Act, 2017 - HELD THAT - On going through the Appeal Memo, it has been observed that the said orders were communicated to the appellant on 26-8-2020 and 24-8-2020 and appeal filed in the instant matter to this office on 14-12-2020 which is delayed by 18 days and 20 days from the prescribed time limit as provided under Section 107(1) of the CGST Act. However, considering the unavoidable circumstances, the delay is condoned in accordance with Section 107(4) of the CGST Act, 2017 - appeal is now proceeded on merits of the case. Whether amount for which refund was filed, is in the nature of Pre-deposit or Tax? - HELD THAT - In the instant case rather contesting the issue to the department, the appellant had opted to reverse the credit which shows that the appellant was satisfied with his own determination of credit. Therefore, question of wrongly or mistakenly reversed of the credit does not arise. Further, there is no doubt that the Input Tax Credit is nothing but it is tax only as per the provisions of the GST Act. Eligible Input Tax Credit lying in the Credit Ledger are utilized for payment of tax liabilities only. In the instant case transitional credit were availed as valid/eligible credit and some part of the credit were reversed by the appellant as a tax only. Therefore, the appellant s contention that the reversal of credit is in nature of pre-deposit, is not acceptable at this stage and I find it is an afterthought of the appellant to avail the benefit of refund. Whether limitation period for filing of refund provided under Section 54 of CGST Act is applicable or not? - HELD THAT - As it is already held that the reversal of ITC is a tax only it may not be termed as deposit/pre-deposit. These said amount were admittedly reversed by the appellant themselves by treating the same as tax only. Further, it is found that the appellant had applied for refund by adopting the procedure as prescribed under Section 54 of CGST Act read with Rule 89 of CGST Rules, 2017 therefore, there are no force in the appellant s contention that the limitation clause of Section 54 of CGST Act, 2017 will not be applied. Whether date of reversal/payment of credit will be the relevant date for the purpose of limitation clause or not? - HELD THAT - The date of reversal of ITC were on 1-2-2018 and 2-2-2018 whereas, the said refund claims was filed on 29-7-2020 which is explicitly/clearly beyond the expiry of two years from the relevant date - The appellant also mentioned in the statement of facts as well as on application of refund that original refund claim filed on 7-12-2019 in Form PMT-04 as manually. In this regard, it is found that the PMT-04 is nowhere considered as application of refund in the provisions of GST Laws. The fact is that the PMT-04 is merely an application under Rules 85(7), 86(6) 87(12) of CGST Rules, 2017 for intimation of discrepancy in Electronic Credit or Cash Ledger hence date of intimation of PMT-04 cannot be taken for relevant date under Section 54 of CGST Act, 2017. Appeal rejected.

Summary

Issues Involved:
1. Nature of the amount for which refund was filed (Pre-deposit or Tax).
2. Applicability of the limitation period for filing a refund under Section 54 of the CGST Act.
3. Determination of the relevant date for the purpose of the limitation clause.

Detailed Analysis:

Issue 1: Nature of the Amount for Refund (Pre-deposit or Tax)
- The appellant argued that the amounts of ?5,83,251 and ?10,89,495, which were reversed as CGST, should be considered as deposits and not as tax since they were not required to be paid. The appellant claimed these amounts were reversed based on the direction of the jurisdictional Superintendent and were later found admissible by departmental audit.
- The adjudicating authority observed that the amounts in question were related to transitional credit availed under Section 140 of the CGST Act, 2017, and were reflected in GSTR-3B for the months of December 2017 and January 2018. The appellant had the option to contest the issue but chose to reverse the credit, indicating satisfaction with the determination of credit. Therefore, the reversal of credit was considered a tax and not a deposit.

Issue 2: Applicability of the Limitation Period under Section 54 of the CGST Act
- The appellant contended that since the reversal of credit should not be considered as tax, the limitation period under Section 54 of the CGST Act should not apply.
- The adjudicating authority held that the reversal of ITC is indeed a tax and not a deposit. Since the appellant applied for a refund under Section 54 of the CGST Act, the limitation clause under this section is applicable. The authority also noted that the judgments cited by the appellant, such as Union of India v. ITC Limited and K.V.R. Constructions v. CCR, Bangalore, were not applicable as they pertained to erstwhile Central Excise provisions and not to CGST provisions.

Issue 3: Determination of the Relevant Date for the Limitation Clause
- The appellant argued that the relevant date for the limitation period should be the date of discovery of the mistake (17-9-2019) and not the date of reversal of credit (1-2-2018). They cited the judgment in Indo-Nippon Chemicals Co. Ltd. v. Union of India to support their claim.
- The adjudicating authority found that the reversal of credit was done by the appellant himself, indicating no mutual mistake. The authority determined that the relevant date for the limitation period, as per clause (h) of sub-section (14)(2) of Section 54 of the CGST Act, is the date of payment of tax. Since the reversal of ITC was on 1-2-2018 and 2-2-2018, and the refund claim was filed on 29-7-2020, it was beyond the expiry of two years from the relevant date.

Conclusion:
- The adjudicating authority concluded that the refund applications were filed after the expiry of two years from the relevant date and were thus time-barred. Both appeals filed by the appellant were rejected, and the orders dated 26-8-2020 and 24-8-2020 were upheld. The appeals were disposed of accordingly.