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TMI Blog2023 (11) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... ), goods can be supplied without payment of tax, upon execution of bond or letter of undertaking. In terms of Section 16 (3)(b), goods can be supplied on payment of tax. Rule 30 (4) of SEZ Rules deals with issue of endorsement by the AO to ensure that the goods have been admitted in full into the SEZ and to treat the same as proof of export. Once the endorsement is made, it would be considered that the goods have been exported. In any event, any duty has been paid in terms of Section 16 (3) (b) of the Act, the assessee would be entitled for refund. In the present case, the question of payment of tax does not arise since the petitioner has paid IGST but there was delay in obtaining the endorsement. Thus, once the assessee had paid the tax and the goods have entered SEZ and obtained endorsement to that effect and furnished the same for the purpose of refund, at any cost, refund cannot be denied for any reason whatsoever. The Officer, who is processing the refund should be concerned only about the aspect as to whether the goods have reached SEZ zone and whether tax for such entry has been remitted or not. In the present case, there is no doubt on the aspect of payment of tax by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r's claim on the reason that the endorsement does not specifically states that the goods that have been admitted in full was for authorized operations, and it only states that the goods were received in full and that the endorsement is incomplete/insufficient/inappropriate, is not tenable. Hence, the findings rendered by the respondent-Department with regard to the denial of claim by citing the delay in obtaining endorsement, endorsement is inappropriate, etc., are set aside. Rejection of claim as barred by limitation since POD was made not at the time of filing applications but at the time of filing reply/personal hearing - HELD THAT:- In the present case, admittedly, the second respondent in respect of the claim made for the month of January 2020 has issued an acknowledgment indicating that the application has no deficiencies but thereafter, issued a show cause notice in Form RFD-08 proposing to reject the claim for refund to an extent of Rs. 84,80,988, which is incorrect. If it is the case of the respondent-Department that the petitioner has filed the applications with deficiencies, the respondent-Department ought to have issued any memo pointing out such deficiency under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2022 for computation of period of limitation for the purpose of filing refund application under Section 54 of the CGST Act. Thus, the petitioner's claim cannot be rejected on the ground of limitation. Mismatch of details, as the endorsement date mentioned in the invoices differs from the endorsement date mentioned in Statement-4 - HELD THAT:- Though the respondent-Department pointed out that the date of endorsement in the invoices is different from the date of endorsement mentioned in Statement-4, in respect of the claim for refund made for the month of December 2019, since said defect was rectified by the petitioner at the time of filing of reply on 28.01.2022 and the petitioner also furnished revised Statement-4, and the same is also accepted by the learned Senior Standing Counsel for the respondent-Department, findings rendered by the respondent-Department on the ground of mismatch are also liable to be eschewed. This Court is of the view that both the first and second respondent have committed a serious flaw in the decision making process and therefore, the impugned orders have to be held to be unsustainable - Petition allowed. - Honourable Mr.Justice Krishnan Ramasamy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( DTA Unit ) and for supply of goods/services to SEZ units made during the months of December, 2019 January 2020 and February 2020, the petitioner filed applications for refund through GSTN Portal claiming refund of IGST paid along with required declarations and undertakings, which is inclusive of Statement-4 along with copies of tax invoices with endorsement made by the Specified/Authorized Officer in respective SEZ. However, the second respondent rejected the said applications and the reason for such rejection in respect of three applications are detailed hereinbelow:- A . In respect of the application for refund made for the month of December, 2019, dated 14.12.2021, to the tune of Rs. 3,47,36,359, the second respondent vide order dated 23.02.2022, rejected the claim partially to the tune of Rs. 2,92,80,806/- on the following grounds:- i) Wrong mention of date of endorsement in Statement-4 so as to cover inordinate delay in getting endorsement from Authorized Officer/Specified Officer (AO/SO). The delay cannot be attributed to the pandemic since the lock down commenced only in March, 2020. ii) Revised Statement-4 filed by the application is not liable to be considered since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the reasons assigned by the second respondent for rejection of refund claim is on the ground of i) Inordinate delay in obtaining the endorsements, ii) POD not at the time of filing of application but only at the time of personal hearing, and hence, the claim is barred by limitation and iii) Mismatch in the Statement-4, which cannot be relied on and claim is rejected. 7 . Rejection of application on the ground of inordinate delay in obtaining Endorsement/Inappropriate Endorsement/Endorsement seal is incomplete/Endorsement does not state that goods supplied were for authorized operations:- 7.1 The learned counsel appearing for the petitioner would pyramid his arguments by submitting that nowhere does the provisions of GST Act require the petitioner to obtain endorsement within period of 45 days from the Authorized Officer from the date of invoice. The learned counsel submitted that though the respondent-Department referred to Rule 30 (4) of SEZ Rules, 2006, which mandates that endorsement has to be obtained within 45 days from the date of invoice, as far as the petitioner's case is concerned, the said Rule 30 (4) of SEZ Rules, 2006 will not come into picture since the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or use of goods for authorized operations was made prospectively w.e.f. 1.10.2023 onwards only. Therefore, the learned counsel contended that rejection of the application on the reason that ''the endorsement does not specifically states that the goods have been admitted in full is for authorized operations and the endorsement only states that the goods were received in full and that is not sufficient, and hence, the claim is rejected'' is not sustainable. 7.4 Therefore, the learned counsel contended that rejection of application on the aforesaid grounds is not tenable. 8. Rejection of applications on the ground of alleged delay in submitting supporting documents:- 8.1 The learned counsel for the petitioner would submit that Section 54 of CGST Act prescribes two years time limit for filing the refund application and though no supportive documents are attached, as per Rule 90(2) of CGST Rules, proper officer shall, within a period of fifteen days of filing of the said application, scrutinize the application for its completeness and if the application submitted is found to be complete, an acknowledgment shall be made available to the applicant through the common portal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on a notification issued by Central Tax, dated 05.07.2022, vide No.13/2022, wherein, it is stated that the period from 01.03.2020 to 28.02.2022 shall be excluded for computation of period of limitation for the purpose of filing refund application under Section 54 of the CGST Act. The learned counsel also in support of his contention relied on a decision passed by this Court, in the case of M/s.Focus Trading Enterprises Vs. Joint Commissioner of GST Appeals I, in W.P.No.6638 of 2022, dated 13.10.2023, wherein, impugned order of rejection of revised returns was quashed as being not barred by limitation in the light of the said notification dated 05.07.2022. Therefore, the learned counsel submitted that non-filing of supporting documents at the time of filing application would not be fatal to the petitioner's claim as the same were filed well within the period of limitation. 9. Mismatch of details 9.1 The learned counsel for the petitioner would submit that in respect of the claim for refund made for the month of December 2019, though the respondent-Department pointed out that the date of endorsement in the invoices is different from the date of endorsement mentioned in Statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Statement-4, the same is barred by limitation; that in respect of the claim made for the month January, 2020 petitioner has not submitted DTA procurement certificate at the time of filing refund applications and submitted the same only at the time of filing reply/personal hearing, which was beyond the period of two years from the relevant date for filing refund claim, and hence, the claim for refund cannot be considered. 11.1 The learned Senior Standing Counsel further submitted that though the learned counsel for the petitioner has taken a stand that the petitioner has supplied the goods to SEZ units and made application for refund under Section 16 of the IGST Act read with Section 54 of the CGST Act read with Rule 89 of CGST Rules and therefore, Rule 30 (4) of SEZ Rules 2006, cannot be applied, the learned Standing Counsel submitted that Rule 89 (2) (e) and Rule 46 of CGST Rules mandates that SEZ Rules have to be followed. The learned Standing Counsel further submits that Rule 30 (4) of SEZ Rules, 2006 and Rule 80 of CGST Rules have to be read conjointly, as the conjoint reading of above legal provisions makes it clear that supply made to SEZ developer or Unit shall be zero-ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the rejection of the claim for refund made for the month of December 2019, since there had been mismatch of details contained in the Statement-4 as the date of endorsement made in the invoices is different from the date of endorsement mentioned in Statement-4, and though the petitioner filed revised Statement-4, since the same had been filed with a delay, the claim has been rejected on the ground of limitation. However, the learned Senior Standing Counsel fairly submitted that since the said defect pointed out by the respondent-Department with regard to mis-match is procedural and curable and the same has been rectified by the petitioner at the time of filing of reply on 28.01.2022 by filing revised Statement-4, the same is accepted. 12. I have given due considerations to the submissions made by the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents 1, 2 and 3. 13. In the present case, the applications made by the petitioner for refund of IGST paid for the supply of goods made to SEZ Units in respect of December, 2019, January, 2020 and February, 2020 came to be rejected partially on the following grounds :- i) Inordinate delay in obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim refund of such tax paid on goods or services or both supplied. Rule 30 (4) of SEZ Rules, 2006 :- '' A copy of the document referred to in sub-rule (1) or copy of Bill of Export, as the case may be, with an endorsement by the authorized officer that the goods have been admitted in full into the SEZ shall be treated as proof of export and copy with such endorsement shall also be forwarded by the Unit or Developer to the Goods and Services Tax or Central Excise Officer having jurisdiction over the DTA Supplier within 45 days failing which, the Goods and Services Tax or Central Excise Officer, as the case may be, shall raise demand of tax or duty against the DTA Supplier'' 14.2 A conjoint reading of Section 16 (3) of IGST Act, 2017 and Rule 30 (4) of SEZ Rules, 2006 would make it clear that the goods can be supplied to SEZ under two situations. One in terms of Section 16 (3)(a) and another in terms of Section 16 (3) (b). In terms of Section 16 (3) (a), goods can be supplied without payment of tax, upon execution of bond or letter of undertaking. In terms of Section 16 (3)(b), goods can be supplied on payment of tax. Rule 30 (4) of SEZ Rules deals with issue of en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be denied on any other reason whatsoever, since, it is the petitioner's legal entitlement to get back the refund of tax paid by him. If at all, there is any lapse, the same has to be sought to be rectified by the petitioner and the application can be processed by the Department to grant refund. If the goods entered into SEZ and endorsement is made after the expiry of 45 days, in such circumstances, if the concerned Officer raised a demand under Rule 30 (4) of SEZ Rule, and the assessee paid demand of tax, in those cases also, the assessee is entitled to for refund. Therefore, significance of the endorsement is only to ensure that the goods have entered into SEZ and also for the purpose of payment of tax or demand against the DTA Supplier. 14.5 In the case on hand, it is an admitted fact that the goods have entered into SEZ and duty has also been paid by the petitioner. Therefore, the failure to obtain endorsement within 45 days is not due to fault on the part of the petitioner and it is for the AO to make endorsement in time, for which, the petitioner cannot be found fault with. Hence, the denial of refund claim by citing that endorsement obtained was not within 45 days and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the denial of claim by citing the delay in obtaining endorsement, endorsement is inappropriate, etc., are set aside. Rejection of claim as barred by limitation since POD was made not at the time of filing applications but at the time of filing reply/personal hearing. 15. So far as the second issue relating to denial of claim on the ground that the application is barred by limitation is concerned, it is seen that Section 54 (1) of CGST Act prescribes time limit of two years only for filing the refund application and accordingly, the petitioner filed claim for the months of December, 2019, January 2020 and February 2020 on the following dates i) 14.12.2021 ii) 27.01.2022 iii) 26.02.2022, which were well within the period of limitation and the same is not disputed by the respondent-Department, however, the respondent-Department objection is only with regard to the non-furnishing of supportive documents at the time of filing application but producing the same at the time of personal hearing and therefore, only from the date on which all relevant documents are received along with application in full, period of limitation would start reckoned and hence, the claim is barred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applications with deficiencies, the respondent-Department ought to have issued any memo pointing out such deficiency under Rule 90(3), instead the second respondent has accepted the petitioner's applications and issued acknowledgment, and therefore, it is not open to the respondent to contend that the supporting documents were filed with a delay. 15.4 Further, it is noticed that, in respect of the claim made for the month of December, 2019, the petitioner has furnished supportive documents only at the time of filing of reply/personal hearing on 28.01.2022 and the same had been accepted by the respondent-Department and the Department also processed the application, while that being so, the respondent-Department cannot take a different stand in respect of the claim made for subsequent period, viz., January 2020, by citing that the documents were filed belatedly, and therefore, claim is not acceptable. 15.5 At this juncture, this Court would like to refer to a Circular issued by the Central Board of Direct Taxation, bearing CBDT No.14 of 1955 dated 11.04.1955, wherein, certain administrative instructions were given for guidance of Income Tax Officers on matters pertaining to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made under official instructions. This equally applies to the Public Relation Officers. 6. The intention of this circular is not that tax due should not be charged or that any favour should be shown to anybody in the matter of assessment, or that where investigations are called for, they should not be made. Whatever the legitimate tax it must be assessed and must be collected. The purpose of this circular is merely to emphasize that we should not take advantage of an assessee s ignorance to collect more tax out of him than is legitimately due from him.'' 15.6 Thus, on a reading of the above Circular would make it clear that when the taxpayer made a claim for refund and if there is any discrepancies or defects in the application made for such claim, the Officer concerned should come forward to assist the assessee bearing in mind the above principles laid down by the CBDT. This Court also expects the Officer concerned to assist the assessee, whenever, the assessee intends to make a claim for refund or any other issue in line with the Circular issued by CBDT. Even in terms of Rule 90 (3), the Officer is supposed to have intimated the deficiencies contained in the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as barred by limitation. Further, even Rule 90 (3) of CGST Act permits to make fresh application, which means that in appropriate cases, the Officer concerned can permit the refund application even beyond the period of limitation. Therefore, I do not find any substance in the submission made by the learned Senior Standing Counsel for the respondent and both respondents have miserably failed to consider the said aspect while passing the impugned orders and hence, the same are liable to be set aside. Hence, this Court holds that when the petitioner has filed application, which is within a period of limitation, viz. 2 years as stipulated under Section 54(1) of the CGST Act, the delay in filing the supporting document at the time of filing of reply/personal herein would only extend the time limit to pass an order under Section 54 (7) of the CGST Act and non-submission of documents at the time of filing application for refund cannot be deemed to have filed with a delay, since there had been a delay in obtaining the endorsement owing to Covid-19, the petitioner could not produce the same at the time of filing application, however, produced the same at the time of personal hearing. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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