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TMI Blog2025 (1) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... e credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible.' >Perforce, the petitioner as was required to reverse Input Tax Credit lying unutilized Input Tax Credit for payment of tax for the period after the Month of July 2018. As such, credit was to lapse with effect from 01.08.2018. The petitioner reversed Input Tax Credit on 19.03.2019 for a sum of Rs. 6,68,66,289/- on 19.03.2019 which is not in dispute. There is also no dispute the aforesaid credit amount was also not utilized by the petitioner after 01.08.2018. >Since, the petitioner had no occasion to utilize the accumulated credit after the cut off date towards the tax liability incurred, the question of imposing interest under Section 50 (3) in terms of above said circular cannot be justified. >Conclusion - Validly av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reflected in the amendment to Notification No.5/2017-Central Tax (Rate) dated 28.06.2017. >7. Considering the same, the GST Council also appears to recommend for dilution of the restrictions in the above mentioned notification, pursuant to which Notification No.20/2018-Central Tax Rate dated 26.07.2018 was issued. Thus, the following provisio was added to Notification No.5/2017- Central Tax (Rate) dated 28.03.2019:- >"Provided that,- >(i) nothing contained in this notification shall apply to the input tax credit accumulated on supplies received on or after the 1st day of August, 2018, in respect of goods mentioned at serial numbers 1,2,3,4,5,6,6A,6B,6C and 7 of the Table below; and >(ii) in respect of said goods, the accumulated input tax credit lying unutilised in balance, after payment of tax for and upto the month of July, 2018, on the inward supplies received up to the 31st day of July 2018, shall lapse." >7A. Relevant portion of the Circular No.94/13/2019-GST dated the 28th March, 2019, which is extracted below:- >Circular No.94/13/2019-GST >F.No.CBEC-20/16/04/2018-GST >Government of India >Ministry of Finace >Department of Revenue >Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot; instead of under the category "refund of unutilized ITC on account of accumulation due to inverted tax structure" in FORM GST RFD-01A. It is emphasized that this application for refund should relate to the same tax period in which such reversal has been made. >b) The application shall be accompanied by all statements, declarations, undertakings and other documents which are statutorily required to be submitted with a "refund claim of unutilized ITC on account of accumulation due to inverted tax structure". On receiving the said application, the proper officer shall himself calculate the refund amount admissible as per rule 89(5) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as "CGST Rules"), in the manner detailed in para 3 of Circular No. 59/33/2018-GST dated 04.09.2018. After calculating the admissible refund amount, as described above, and scrutinizing the application for completeness and eligibility, if the proper officer is satisfied that the whole or any part of the amount claimed is payable as refund, he shall request the taxpayer, in writing, to debit the said amount from his electronic credit ledger through F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund under Section 4 of the CGST Act, 2017. However, in respect of accumulated Input Tax Credit lying in its credit for the past period for a sum of Rs. 6,86,66,289/- as on 31.07.2018 was to lapse. However, if there was delay in reversal of such credit availed in the past, the revenue was to be calculated starting from the due date of filing of return in FORM GSTR-3B for the month of August, 2018 till the date of reversal of said amount through FORM GSTR- 3B or through FORM GST DRC-03,as the case may be. The registered person who has reversed the amount of credit to be lapsed in the return in FORM GSTR-3B for any month subsequent to August, 2018 or through FORM GST DRC-03 subsequent to the due date of filing of the return in FORM GSTR-3B for the month of August, 2018 would remain eligible to claim refund of unutilized ITC on account of accumulation due to inverted tax structure w.e.f., 01.08.2018. However, such refund shall be granted only after the reversal of the amount of credit to be lapsed, either through FORM GSTR-3B or FORM GST DRC-03, along with payment of interest, as applicable. >9. A refund claim that was filed by the petitioner on 19.06.2019 was also sanctioned by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . >15. It is therefore, submitted that the impugned order of 3rd respondent in impugned Order-in-Original of the 3rd respondent confirming the order of the 3rd respondent in FORM-GST-RFD-06 dated 13.08.2019 is liable to be set aside. >16. Learned counsel for the respondent on the other hand submits that the impugned Circular No.94/13/2019-GST dated 28.03.2019 does not call for any interference as it has been issued in accordance with the powers vested with the Central Board of Indirect Taxes and Customs under Section 168(1) of the GST Act, 2017. It is submitted that the said circular is perfectly in sync with the requirements of Section 50 (3) of the CGST Act, 2017. >17. Learned counsel for the respondent further submitted that since the petitioner submitted that the petitioner was having excess of accumulated Input Tax Credit all through the period, the prayer for quashing para No.3 in Circular No. 94/13/2019-GST dated 28.03.2019 not be entertained. >18. I have considered the submissions advanced by the learned counsel for the petitioner and learned counsel for the respondents and having perused the records before this Court and the provisions of CGST Act, 2017. >19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, levy of interest of Rs. 59,35,528/- purportedly in exercise of power under Sub-Section 3 of Section 50 of the CGST Act, 2017 is unjustified. The question of levy of interest under the impugned circular would apply to the petitioner only if there was a wrong utilization of the Input Tax Credit accumulated prior to the cut off date in the Notification No.20/2018- Central Tax Rate dated 26.07.2018. >24. Since, the petitioner had no occasion to utilize the accumulated credit after the cut off date towards the tax liability incurred, the question of imposing interest under Section 50 (3) in terms of above said circular cannot be justified. >25. However, it would require a detailed consideration by the authorities. Under these circumstances the impugned Order-in-Appeal No.21/2020 dated 20.08.2020 confirming the powers of the 3rd respondent dated 13.08.2019 in FORM-GST-RFD-06 insofar as it seeks to disallow the refund of Rs. 59,35,528/- by adjusting the same towards interest for a period between upto 19.03.2018 is set aside and the case is remitted back to the 3rd respondent to redo the exercise within a period of three (3) months from the date of receipt of copy of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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