9911796707
TMI Blog2024 (8) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the petitioner s claim for refund was on account of export of goods. Section 16 (1) of the IGST Act provides that the expression zero rated supplies includes export of goods or services or both. Section 16 (3) of the IGST Act provides that a registered person who makes zero rated supplies shall be eligible to claim refund of unutilized ITC on supply of goods or services or both without payment of integrated tax under a bond or a Letter of Undertaking, in accordance with the provisions of Section 54 of the CGST Act. Thus, in terms of Section 16 (3) of the IGST Act, the petitioner is entitled to refund of unutilized ITC on export of goods. The petitioner did furnish the BRCs evidencing the realization of sale proceeds of export of goods. This is noted by the appellate authority in the impugned order. Notwithstanding the same, the appellate authority did not accept the BRCs by referring to Rule 96B of the CGST Rules. Rule 96B(1) of the CGST Rules provides that where refund of unutilized ITC on account of export of goods has been paid to an applicant but the sale proceeds have not been realized in full within such period as provided under FEMA including any extension thereof, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Keshav Garg and Mr Aamnaya Jagannath Mishra, Advocates. For the Respondents Through: Mr Syed Abdul Haseeb, CGSC for R1. Mr Atul Tripathi, SSC for CBIC with Mr V.K. Attri, Mr Amresh Jha and Ms Priya Kumari, Advocates. VIBHU BAKHRU, J. (ORAL) 1. The petitioner, a Hindu Undivided Family, is engaged in the business of trading and export of automotive spare parts, automobile components and other allied products in the name and style of its proprietorship concern, M/s Sagar Scooter Syndicate . The petitioner is registered under the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act) and has been assigned the Goods and Services Tax Identification No. (GSTIN) :07AAPHR6437P1Z6. 2. The petitioner has filed the present petition impugning an Order-in-Appeal dated 24.04.2023 (hereafter the impugned order ), whereby the petitioner s appeal under Section 107 of the CGST Act against an Order-in-Original dated 01.11.2022 (hereafter the impugned refund rejection order ), was dismissed. 3. Although, the petitioner has the remedy of an appeal before the Appellate Tribunal in terms of Section 112 of the CGST Act but the petitioner cannot avail of the said remedy as the Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y also did not accept that the petitioner was entitled to any relief on account of producing the BRCs in the appellate proceedings. The appellate authority proceeded on the basis that in terms of Rule 96B of the Central Goods and Services Tax Rules, 2017 (hereafter the CGST Rules) a taxpayer was required to deposit the amount refunded in case the export proceeds were not realized within the period allowed under the Foreign Exchange Management Act, 1999 (hereafter FEMA). The appellate authority held that since in the present case the refund had not been granted, sanctioning the refund would be an empty formality as the petitioner would be required to re-deposit the same on account of non-receipt of sale proceeds within the period of nine months. 9. The appellate authority also upheld the findings of the adjudicating authority that the ledger account of the suppliers submitted by the petitioner was incomplete and thus, the petitioner had failed to establish that it was not disentitled to avail the benefit of ITC in terms of Section 16 (2)(c) of the CGST Act. 10. The petitioner has also impugned the provision of Rule 96B of the CGST Rules on the ground that it is ultra vires the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant, he shall issue a notice in FORM GST RFD-08 to the applicant, requiring him to furnish a reply in FORM GST RFD-09 within a period of fifteen days of the receipt of such notice and after considering the reply, make an order in FORM GST RFD-06, sanctioning the amount of refund in whole or part, or rejecting the said refund claim and the said order shall be made available to the applicant electronically and the provisions of sub-rule (1) shall, mutatis mutandis, apply to the extent refund is allowed: Provided that no application for refund shall be rejected without giving the applicant an opportunity of being heard. 16. A plain reading of the said Rule indicates that a notice for rejection of an application for refund can be made only if the proper officer has satisfied himself that the claim for refund is not admissible. Rule 92 (3) of the CGST Rules does not contemplate a general enquiry for eliciting documents or examining the returns. The necessary condition for issuance of a notice in a FORM GST RFD-08 is the satisfaction of the proper officer that the refund is inadmissible. 17. Rule 89 (1) of the CGST Rules contains provisions for making an application for refund of tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner is entitled to refund of unutilized ITC on export of goods. 21. The expressions export of goods and export of services are defined under Sections 2 (5) and 2 (6) of the IGST Act respectively. The same are set out below: 2. Definitions In this Act, unless the context otherwise requires, *** *** *** (5) export of goods with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India; (6) export of services means the supply of any service when, (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 22. It is material to note that whereas the expression, export of services is defined to mean supplies of services where the payment of the services has been received by the supplier of services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded under FEMA including any extension thereof, the persons to whom refund is made are required to deposit the same along with applicable interest within a period of thirty days of the stipulated period within which the sale proceeds were required to be realized. The appellate authority had reasoned that granting of refund would not serve any purpose because the petitioner would be required to re-deposit the same. However, this reasoning is flawed as it ignores Sub-rule (2) of Rule 96B of the CGST Rules, which provides that if the applicant produces BRCs within three months of realization of export sale proceeds; any amount recovered under Sub-rule (1) of Rule 96B of the CGST Rules would be refunded by the proper officer. Rule 96B of the CGST Rules is set out below: 96B. Recovery of refund of unutilised input tax credit or integrated tax paid on export of goods where export proceeds not realised. ( 1) Where any refund of unutilised input tax credit on account of export of goods or of integrated tax paid on export of goods has been paid to an applicant but the sale proceeds in respect of such export goods have not been realised, in full or in part, in India within the period allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority found that the ledger accounts provided by the petitioner were incomplete and hence, the payments against the inward supplies could not be verified with the bank statements. It thus, rejected the petitioner s application for refund. The appellate authority upheld the said order. However, the reason set out in the impugned order are somewhat different from the reason as set out in the impugned refund rejection order. The appellate authority had noted the reasons of the adjudicating authority for rejecting the petitioner s claim for refund to the effect that the petitioner had not submitted any clarification in regard to payments made to suppliers. However, in addition, the appellate authority also referred to Section 16 (2) of the CGST Act and observed that the compliance of the said section also requires furnishing evidence to establish that the supplier of inward supplies had deposited tax with the Government. 29. Section 16 (2) (c) of the CGST Act provides that no registered person would be entitled to credit of any ITC in respect of supply of goods or services or both unless, subject to the provisions of Section 41 of the CGST Act, the tax charged in respect of such sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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