This appeal has bean filed under Section 107 of the Central Goods and Service Tax Act 2017 by M/s. Akash Granites, H-162, RIICO Industrial Area, Shahpura, Jaipur(hereinafter also referred to as “the appellant”) against the Order-in-Original No. CGST/DIV-E/183/2018/ dated 25.02.2019 (hereinafter called as the “impugned order”) passed by the Assistant Commissioner, Central Goods & Service Tax Division-E, Jaipur(hereinafter called as the “adjudication authority”).

2. BRIEF FACTS OF THE CASE:

2.1 The appellant is having GSTIN No.08AFHPK9416JIZ3 filed application for refund claim in respect of Input Tax Credit of ₹ 1,41,378/- for the month of November-2017 accumulated on account of Inverted Tax Structure. The appellant has supplied goods to exporters at the rate of 0.05% (Central Tax Rate) and 0.1% (Integrated Tax Rate), provided in Notification No.40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017.

2.2 Further, on examination of claim papers submitted by the appellant and on the basis of report dated 27.09.2018, received from jurisdictional Range Officer, the adjudicating authority had rejected the refund claim of Input Tax Credit of ₹ 1,41,378/- for the month of November-2017 accumulated on account of Inverted Duty Tax Structure. The appellant has supplied the goods to exporters at the Fate of 0.05% (Central Tax Rate) and 0.1% (Integrated Tax Rate), provided in Notification No.40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017 respectively. The adjudicating authority had rejected the refund claim of ₹ 1,41,378/- on account of non compliance of conditions laid down in Notification No.40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017 which reads as under:-

Condition No. (v) as per Notification No. 40/2017 & 41/2017 dated 23.10.2017 – In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as “the said Act”), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of taxable goods (hereafter in this notification referred to as “the said goods”) by a registered supplier to a registered recipient for export, from so much of the central tax leviable

(v) the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;

Condition No.(ix) as per Notification No. 40/2017 & 41/2017 dated 23.10.2017- In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), (hereafter in this notification referred to as “the said Act”), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the inter-State supply of taxable goods (hereafter in this notification referred to as “the said goods”) by a registered supplier to a registered recipient for export, from so much of the integrated tax leviable thereon under section 5 of the Integrated Good and Services Tax Act, 2017 (13 of 2017), as is in excess of the amount calculated at the rate of 0.1 per cent., subject to fulfilment of the following conditions, namely :-

(ix) when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier.

2.3 As per the condition mentioned at serial no.(v) in both the notifications i.e. 40/2017 -Central Tax (Rate) dated 23.10.2017 and 41/2017 -Integrated Tax (Rate) dated 23.10.2017, the registered recipient should have provided a copy of order placed at concessional rate of duty to the jurisdictional tax officer of the registered supplier, and the same was not provided to the range office (jurisdictional tax officer of the registered supplier). Also entry No. (ix) reads that when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier.

In absence of these above intimations of order placed, and export report it is not feasible to recognize whether goods have been supplied by the appellant at concessional rate of duty.

3. Accordingly, the adjudicating authority has rejected the refund claim filed by the appellant in respect of Input Tax Credit of ₹ 1,41,378/- for the month of November-2017 accumulated on account of Inverted Tax Structure vide the above impugned order dated 25.02.2019.

4. Being aggrieved with the impugned order dated 25.02.2019, the appellant has filed the appeal on the following grounds which are summarized as under:-

-that impugned order is a non speaking and was passed without appreciating the documents available on records, provisions of GST law and in violation of principle of judicial discipline and rejection of refund claim is pervasive and bad in the eye of law.

-that the required documents had been submitted in the range office by the appellant as much as e mail was also sent at the mail id of range office and division office.

-that the observation taken in para 6 of impugned order is that the RO has reported vide his, letter dated 07.01.2019 that no such letter of intimation has been received from the registered recipient in their office and the copy submitted by the applicant has no evidence or seal of office which prove that the intimation/document was not submitted to the department in the scheduled time although documents was sent by the appellant through speed post and mail was also sent by the appellant. Again all the copy of documents sent by the appellant is enclosed herewith this appeal.

-that circular No.37/11/2018-GST dated 15.03.2018 has been issued to clarify various issues in relation to processing of claims for refund. In Para 15 of the circular it is stated that “it is also advised that refunds may not be withheld due to minor procedural lapse or non-substantive errors of omission” and requested for not to withheld refund claim due to minor procedural lapse or non-substantive.

-that it is well settled law that notification or circular in relation to procedural aspect should be given very liberal interpretation and that might be considered clarificatory in nature and there is no dispute about admissibility of ITC and refund claim except some minor procedural errors which are not leading any irregularity about tax paid on inward supplies hence refund may kindly be allowed.

Appellant has relied upon on various judgement in their defence which are as under:-

M/s. Mangalore Fertilizers & Chemicals v/s Dy Commissioner 1991 (55) ELT 437 (SC) = 1991 (8) TMI 83 – SUPREME COURT

M/s. SG Sales Corporation, Hon’ble Commissioner(Appeals), Central Excise and Service Tax Jaipur has also taken the same view that if  substantive compliance is made the benefit may not be denied.

5. Personal Hearing in the matter was held on 20.02.2020 wherein Sh. Ravi Gupta, Advocate of the appellant appeared. He explained the case in details and reiterated the submissions made in their appeal memorandum. At the time of personal hearing he further stated that for subsequent period the refund was paid by the jurisdictional authorities.

6. I have carefully gone through the case records and submissions made in the appeal memorandum as well as oral submission made at the time of personal hearing held on 20.02.2020. I find that the adjudicating authority has alleged that the appellant has not complied with the conditions mentioned at serial no.(v) & (ix) of the Notification No.40/2017 dated 23, 10.2017 and 41/2017 dated 23.10.2017 and rejected the refund claim of Input Tax Credit accumulated on account of Inverted Duty Structure filed by the appellant under Section 54 of the CGST Act, 2017.

The condition no.(v) & (ix) of the Notifications i.e. 40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017 reads as under:

v) the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;

(ix) when goods have been exported, the registered recipient shah provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier.

Further, as per Para 13 of circular No. 37/11/2018-GST dated 15.03.2018 Supplies to Merchant Exporters:- Notification No. 40/2017 -Central Tax (Rate), dated 23.10.2017 and 41/2017- Integrated Tax (Rate) dated 23.10.2017 provide for supplies for exports at concessional rate of 0.05% and 0.1% respectively, subject to certain conditions specified in the said notifications.

13.1 It is clarified that the benefit of supplies at concessional rate is subject to certain conditions and the said benefit is optional. The option may or may not be availed by the supplier and / or the recipient and the goods may be procured at normal applicable tax rate.

13.2 It is also clarified that the exporter will be eligible to take credit of the tax @ 0.5% / 0.1% paid by him. The supplier who supplies goods at concessional rate is also eligible for refund on account of inverted tax structure as per the provisions of clause (ii) of the first proviso to sub-section (3) of Section 54 of the CGST Act. It may also be noted that the exporter of such goods can export the goods only under LUT/bond and can not export on payment of integrated tax. In this connection, notification No. 3/2018-Central Tax dated 23.01.2018 may be referred.

7. I find that condition No.(v) and (ix) of both the Notification No.40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017 have not been complied with by the appellant in the instant case. The contention of the appellant that they have submitted copy of purchase orders, shipping bill or bill of jading to the Range Office in respect of supply made by the appellant and therefore condition enumerated in the notification has been very well complied with, is not acceptable. The burden to prove on which date and how the related documents were supplied is on the appellant. There should be a dated acknowledgement duly stamped by the department to prove that the relevant documents have been submitted to the department so that benefit could be provided to the appellant. But the appellant could not produce any substantial document which could prove/substantiate their claim that he has complied With the conditions of both the Notifications i.e. 40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017.The reliance placed by the appellant in their defence is not applicable in the instant case before me.

8. In view of the legal provisions and conditions of both the Notifications i.e. 40/2017 dated 23.10.2017 and 41/2017 dated 23.10.2017 I find that the adjudicating authority has rightly rejected the claim and I do not find any reason to interfere at this stage.

In view of the above, I reject the appeal filed by the appellant.