This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 by M/s Arihant Plast, Plot No.G-119, Road No.3, RIICO Industrial Area, Bindayaka, Jaipur-302012 (hereinafter also referred to as “the appellant”) against the Order-in-Original No.(RFD-06) Dated 18.05.2020 (hereinafter as “the impugned order”) passed by the Assistant Commissioner, Central Goods & Service Tax Division-G, Jaipur (hereinafter called as “the adjudicating authority”),

2.  BRIEF FACTS OF THE CASE:

2.1  The appellant having GSTIN No.08AACFA8203H1ZR is engaged in manufacture of Sprinkler Irrigation System including their parts/ components, has filed refund claim of IGST ₹ 21,00,000/-  under Section 54 of CGST Act, 2017 vide ARN Number AA080320023737G dated 18.03.2020.

2.2  The adjudicating authority has issued a show cause notice in Form GST-RFD-08 dated 07.04.2020 stating therein the reason that the refund claim has been filed by the appellant in Other category and only period March-2020. Further, the adjudicating authority has passed the Order in Original in the Form of RFD-06 dated 18.05.2020 and rejected the refund claim on the ground that the appellant has filed a refund application in other category which was deposited against differential rate of GST @6% on parts and components of sprinkler system for the financial year 2018-19 in terms of Section 74(5) of CGST/RGST Act, 2017 read with Rule 142(2) & (3) of CGST Rules, 2017. The adjudicating authority has also given a reason for rejection that the refund application is premature as investigation in the matter is pending with DGGSTI, Jaipur Zonal unit, Jaipur.

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

• that the learned Adjudicating Authority rejected the refund claim on the basis of report/ letter issued by the DGGI, Jaipur along with their comments. The copy of the above said letter did not provide to appellant, which is vital part of this Adjudication Proceeding. Without providing the copy of above said DGGI, Jaipur’s letter, the rejection order passed by the learned Adjudicating Authority is against the law of natural justice, hence bad in the eye of law, accordingly deserves to be set aside.
• that the learned Adjudicating Authority wrongly considered that period declared by the appellant in their refund claim is wrong. In fact appellant mentioned the date of debit of disputed amount, and period of dispute arises from that day. Moreover the limitation of refund governed from the date of deposit of tax etc., not from the period of dispute. Hence the Observations of the learned Adjudicating Authority are wrong, deserves to be set aside.
• that the learned Adjudicating Authority wrongly observed that the said amount as claimed in the refund was voluntary paid by the appellant. This is a proved fact that the said amount (as claimed in refund) paid by the appellant under the direction of the officers visited in the premises of the appellant, as on the same day the claimed amount has been deposited. Further the tariff rate of the parts/components of sprinkler system is a question of law, which can be determined on the basis of law. Hence no discrepancies in this regard, accordingly the said allegation deserve to be set aside.
• that we are manufacturer of Sprinkler Irrigation System including their parts/ components and paying GST @ 12 %, after amendment vide notification no. 6/2018-CentraI Tax (Rate), dated 25.01.2018 read with circular no. 81/55/2018-GST (Letter no. 354/408/2018-TRU issued by Ministry of Finance, Department of Revenue), dated 31.12.2018. This circular was issued against the representation from the trade.
• that moreover we wish to bring your kind attention to C.B.I. & C. Press Release no. 78/2018, dated 22.12.2018, in which clarification was made in respect of amendment in entry no. 325 of notification no. 1/2017-CentraI Tax (Rate), dated 28.06.2017 i.e. Sprinkler system consisting of nozzles, lateral and other components would attract 12% GST rate under S. No. 195B of Notification No. 1/2017-central Tax (Rate), dated 28-6-2018.
• that the Officers from DGGSTI (JZU), Jaipur were visited In our factory premises on 2.03.2020 and misguided us that parts /components of sprinkler system are bearing GST tariff rate of 18 % instead of 12 %. In this regard, During the visit of the factory by the officers forced us to pay differential GST, as above, i.e. @6%. Under the directions of the officers we paid part payment, which was available at the point of time, detailed as under:

(a) Vide DRC-03 – ARN No. – AD080320000363U- ₹ 2100000/

• that the above said payment were made under the direction of the learned officers, as they explained that parts and components of the sprinkler system are not covered under GST tariff rate of 12 % but they are covered under GST tariff rate of 18 %
• that in this regard, we wish to bring your kind attention to the provisions of law, which are as below:-

(i) Earlier vide notification no. 1/2017 – Central Tax (Rate) the rate of sprinkler system was introduced 18 % (CGST and SGST) as was in schedule -III ( entry no. 325 of schedule III).

(ii) Thereafter notification no. 6/2018-CentraI Tax (Rate), dated 25″ January, 2018, issued and made amendment in notification no. 1/2017 – Central Tax ( Rate), ibid. As per this amended notification no. 6/2018, ibid., following amendments made-

In schedule -II,

(xiii) after S. NO. 195A, and entries relating thereto the following serial  number and the entries shall be inserted, namely : –

In schedule-III,

(xi) in S. No.325, for the entry in column (3), the entry “Mechanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines [other than sprinklers; drip irrigation systems including laterals; mechanical sprayer; nozzles for drip irrigation equipment or nozzles for sprinklers]” shall be substituted;

(iii) After above said amendment, the dispute arises in respect of parts/ components/ laterals of sprinkler system. On being represented by the trade, Press Release no.78/2018 dated 22.12. 2018 was issued in which it was clarified as below:

Clarifications

• Sprinkler system consisting of nozzles, lateral and other components would attract 12% GST rate under S. No. 195B of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2018.

Thereafter Circular no. 81/55/2018-GST (Letter no. 354/408/2018-TRU issued by Ministry of Finance, Department of Revenue), dated 31.12.2018 and clarified as below

• that the contents of the above circular are very much relevant and important.

4. Personal Hearing in the matter was fixed on 17.12.2020 at 1100 Hrs through video conference. Shri Arvind Sharma, Advocate, Representative of the appellant vide email dated 17.12.2020 has informed to this office that in lieu of personal appearance and in compliance of personal hearing their written submission in the case of M/s Arihant Plast, Jaipur may kindly accept and oblige. Accordingly, the case is being taken up for decision.

5.  I have carefully gone through the case records and written submission in the appeal memo as well as additional submission received through e-mail dated 17.12.2020 in which the appellant has reiterated the same grounds as already mentioned in their appeal memo. I find that the adjudicating authority has rejected the refund claim on the grounds that the appellant has filed a refund claim in other category and is premature as investigation in the matter is pending with DGGSTI, Jaipur Zonal unit, Jaipur.

Further, find that the adjudicating authority has given his findings on the basis of the comments received from DGGSTI, Jaipur are as under: –

a)  The taxpayer has filed refund application for the period March-2020. Whereas, the refund claim amount ₹ 21,00,000/- was voluntary  deposited for the financial year 2018-19 in terms of Section 74(5) of CGST/RGST Act, 2017 read with Rule 142(2) & (3) of CGST Rules, 2017. Thus, the taxpayer has declared wrong tax period with intent to claim refund.

b)  There is no provision to refund tax which was deposited voluntarily under Section 74(5) of CGST Act 2017/RGST Act, 2017 read with Rule 142(2) & (3) of CGST Rules, 2017 when the investigation is in process.

c)  The matter of short payment of GST on supply of parts/accessories/fittings/components is under investigation. Thus the filing of refund claim at this juncture appears pre-mature as the matter is under investigation.

In view of the comments of DGGST, Jaipur Zonal Unit, Jaipur the adjudicating authority has rejected the refund claim amounting to ₹ 21,00,000/- being inadmissible to the claimant.

6.  In view of the above facts, I find that the appellant has deposited the said amount vide DRC-03 dated 02.03.2020 during the investigation and further he himself stated that matter is still under investigation with DGGSTI, Jaipur. Therefore, I find that refund claim filed by the appellant at this stage is premature and it has not attained its finality. Accordingly I reject the appeal filed by the appellant and uphold the Order in Original passed by the adjudicating authority as I do not find any infirmity in the Impugned order.

7.  Accordingly, the appeal is disposed off in above mentioned  by Manzoor Ali Ansari