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TMI Blog2024 (8) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... peal 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 Tribunal has not been constituted. In the given circumstances we consider it apposite to entertain the present petition. 4. The petitioner made an application dated 23.08.2022, in the proper format (Form GST RFD-01), seeking refund of the accumulated Input Tax Credit (hereafter ITC) for the period of November, 2021 for an amount of Rs.12,82,643/-. The petitioner claimed that it had exported the goods without payment of tax and was entitled to refund of the accumulated ITC in respect of the zero-rated supply under Section 16 of the Integrated Goods and Services Tax Act, 2017 (hereafter the IGST Act). 5. The Adjudicating Authority issued a Show Cause Notice (hereafter SCN) dated 10.10.2022 in FORM GST RFD-08 proposing to reject the petitioner's application for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 provisions of the CGST Act and the IGST Act. 11. According to the petitioner, there is no requirement for a taxpayer to receive the sale proceeds of export of goods within the period stipulated under FEMA for the taxpayer to claim refund of tax under Section 16 of the IGST Act. However, the learned counsel for the petitioner does not press the challenge to the vires of Rule 96B of the CGST Rules and has confined the present petition to assailing the impugned order on merits. REASONS & CONCLUSION 12. As is apparent from the above, the petitioner's application for refund was proposed to be rejected on four grounds. First, that there was a discrepancy in respect of certain invoices as they were not reflected in the return (GSTR-2A) f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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, interest, penalty, fees or any other amount. Rule 89 (2) of the CGST Rules sets out the documents that are required to be furnished along with the application (which is required to be submitted in FORM GST RFD-01). The proper officer is required to examine the said application and issue an acknowledgement under Rule 90 of the CGST Rules. If certain deficiencies are noticed in the application, the same are required to be communicated to the applicant in FORM GST RFD-03 as provided under Rule 90 (3) of the CGST Rules. 18. In the present case, the Proper Officer has not issued any deficiency memo and thus, it must be assumed that all documents necessary for processing the refund claim, as required under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 in convertible foreign exchange or in Indian rupees as permitted by the Reserve Bank of India, no such condition is in the definition of the expression, 'export of goods', under Section 2 (5) of the IGST Act. 23. There is merit in the petitioner's case that its claim for refund could not be rejected on account of non-furnishing of BRCs. 24. It is also necessary to refer to Circular No. 125/44/2019-GST dated 18.11.2019 issued by the Central Board of Indirect Taxes and Customs. The said Circular also expressly provides that furnishing of BRCs is not a necessary condition for claiming refund in case of export of goods. Paragraph 48 of the said Circular is relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under the Foreign Exchange Management Act, 1999 (42 of 1999), including any extension of such period, the person to whom the refund has been made shall deposit the amount so refunded, to the extent of non-realisation of sale proceeds, along with applicable interest within thirty days of the expiry of the said period or, as the case may be, the extended period, failing which the amount refunded shall be recovered in accordance with the provisions of section 73 or 74 of the Act, as the case may be, as is applicable for recovery of erroneous refund, along with interest under section 50: Provided that where sale proceeds, or any part thereof, in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 supply has actually been paid to the government. It is material to note that there was no allegation in the SCN to the effect that the adjudicating authority was satisfied that the petitioner's application for refund was liable to be rejected on the ground that the tax had not been deposited by the suppliers from whom the petitioner received supplies. Thus, reference to Section 16 (2) of the CGST Act was, plainly, outside the context of the appeal. 30. The adjudicating authority had rejected the petitioner's claim as it was not satisfied that the petitioner had made payment for the inward supplies. In this regard, the learned counsel for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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