The above Five (5) appeals have been filed before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017 by M/s Shri Balaji Industries Products Limited, 48, Industrial Area, Jhotwara, Jaipur ( Here in after also referred to as “the appellant”) against the Orders in Original (Here in after called as the “impugned orders”) passed by the Deputy Commissioner, Central Goods & Service Tax Division-A, Jaipur (Here in after called as the “adjudication authority”) as mentioned below:-

2.  BRIEF FACTS OF THE CASE:

2.1  The appellant is registered under GST with GSTIN 08AAACB7092EIZR. The said appellant was also earlier registered under Central Excise having Registration No.AAACB7092EXM001 and was engaged in the manufacture of High Chrome Grinding Media Balls and Alloy Steel Castings falling under Chapter Heading No.73259100 and 73259920 of the Central Excise Tariff Act, 1985. The appellant filed applications for refund for Central Excise duty paid on the goods cleared by various invoices mentioned in the impugned orders but the impugned goods returned as rejected from registered buyer under Section 142(1) of the CGST Act, 2017.

2.2  The appellant has paid Central Excise Duty on the impugned goods cleared before appointed day but the goods was returned after appointed day. On examination, it was found that the refund claims were filed to the jurisdictional authority, thereafter, the jurisdictional authority issued Show Cause Notices to the appellant as to why the refund claims be rejected on the various reasons. After considering the submissions made by the appellant, the adjudicating authority vide the impugned orders as mentioned in the column No.3 of Para 1 of this order has rejected all the refund claims mentioned in column No.4 of Para 1 on the following grounds;

(A)  The identity of returned goods/rejected goods cannot be identified with the goods sent originally to the receiver by the appellant.

(B)  The receiver of goods who returned the goods are registered with GSTIN and therefore they were required to return the rejected goods to the appellant as supply in terms of section 142(1) of the CGST Act, 2017.

3.  Being aggrieved with the impugned orders, the appellant has filed these appeals for seeking relief on the various grounds which may be summarized as under:

3.1  Regarding intimation under Section 142(1) of the CGST, 2017. It is submitted that on perusal of Section 142(1) of the CGST, 2017 it is clear that no obligation is casted on the Appellant to intimate the department on receipt of rejected goods. Therefore, the refund can not be rejected on this ground.

3.2  It is also submitted that since the goods supplied by the Appellant have been rejected and returned back by M/s Damodar Valley Corporation Chandrapura Thermal Power Station, Chandrapura, Bokaro, Jharkhand and by M/s Neyveli Lignite Corporation Limited. It is a simple case of rejection and return of goods to the appellant. Since, the returned goods have been rejected. Therefore, it is not a case of supply of goods. Thus on this ground the refund is not required to be rejected. Further, it is important to note that M/s Damodar Valley Corporation, Chandrapura Thermal Power Station, Chandrapura, Bokaro, Jharkhand and M/s Neyveli Lignite Corporation Limited are exempt from payment of GST therefore, the return of rejected goods are not supply in the hands of M/s Damodar Valley Corporation, Chandrapura Thermal Power Station, Chandrapura, Bokaro, Jharkhand and M/s Neyveli Lignite Corporation Limited. Consequently, the condition in the Section 142(1) of the CGST, 2017 is satisfied.

4.  Personal hearing in all these matters was held on 29.11.2018 wherein Shri Pankaj Malik, Partner of M/s Pankaj Malik & Co., appeared for personal hearing in the case on behalf of the appellant and reiterated the grounds of appeals mentioned in the appeal memorandum and requested to decide the case accordingly.

5.  I have carefully gone through the case records and submission made in the appeal memorandum as well as at the time of personal hearing. I find that in all the five appeals, the issue involved is that the appellant filed applications for refund under section 142(1) of the CGST Act, 2017 for Central Excise Duty paid on goods cleared before appointed day but the goods were returned by the receiver after appointed day. In terms of provision of section 142(1) of the CGST Act, 2017, where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business’ on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer.

Provided that if the said goods are returned by a registered person the return of such goods shall be deemed to be a supply. On plain reading of the provisions of the section 142(1) of the CGST Act, 2017, it can be seen that refund is admissible in following circumstances;

(A)   If the goods are sold/removed within 6 months prior to the appointed day.

(B)  If the goods are returned within 6 months from the appointed day.

(C)  If the proper officer can satisfactorily identify the goods.

(D)  If such goods are returned by a person, other than a registered person

(E)  If the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.

6.  The adjudicating authority has rejected the refund claims filed by the appellant on the two reasons. Therefore I take up the reasons one by one. The adjudicating authority has rejected all the refund claims on the ground that in the copy of Stock/RG-1 register, the rejected goods are mentioned in weight as the unit, while in all the documents i.e. invoices, transport note, out gate pass, the quantity of rejected goods are mentioned in Number, as such identity of the return goods is in doubt and not properly established. The appellant has contested that they are maintaining RG-I register in Metric Tonnes but order received in Nos./Sets, so invoices are prepared as per orders and weight is also mentioned in the invoices issued by them. They also contested that it cannot be said that the rejected goods are not same when the description of goods, quantity, weight, value, duty paid is matching in the invoices issued by them and the rejection letter issued by M/s Damodar Valley Corporation or by M/s Neyveli Lignite Corporation Limited is also available. I observe that there is a basic condition that the goods are identifiable to the satisfaction of the proper officer. But in the instant matter, the records have been so maintained that the proper officer is not in a position to ascertain the factual identification of returned goods from the records maintained by the appellant. The appellant has also failed to put forth any reasons as to when the subject goods were initially removed in the unit quantity as “Nos” then why the entry of said returned goods in their register have only been made in the unit quantity as “weight in MT”. Thus this also creates a doubt. Therefore, I do not find any force in the contention of the appellant and hold that the appellant has in all fronts failed to establish that the goods are identifiable to the satisfaction of the proper officer.

7.  The adjudicating authority has also rejected the refund claims on the reason that the receiver of the goods are registered with GSTN and therefore they were required to return the rejected goods to the appellant as supply in terms of section 142(1) of the CGST Act, 2017. The appellant has contested that the goods supplied by them were rejected and returned back, therefore it is not a case of supply in the hands of M/s Damodar Valley Corporation or by M/s Neyveli Lignite Corporation Limited and that the receiver of goods namely M/s Damodar Valley Corporation or by M/s Neyveli Lignite Corporation Limited are exempt from payment of GST and therefore, return of rejected goods are not supply. I find that the appellant has not disputed the findings of the adjudicating authority that the receiver of goods namely M/s Damodar Valley Corporation are registered with GSTN bearing GSTN-20AABCD0541MIZ5 and M/s Neyveli Lignite Corporation Limited are registered with GSTN bearing GSTN-33AAACN1121C1ZG. Therefore, the contention of the appellant is not acceptable in view of the clear provision of law which stipulates that the registered person shall be eligible for refund of the duty paid under the existing law only where such goods are returned by a person, other than a registered person. But in the instant matter the goods were returned by the registered person, therefore refund is not admissible in the instant matter on this reason also. Besides, the proviso to section 142(1) of the Act provides that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply. The goods returned by M/s Damodar Valley Corporation or by M/s Neyveli Lignite Corporation Limited who are registered person, should be treated as ‘Deemed Supply’ in their hands in terms of proviso to section 142(1) of the CGST Act, 2017. M/s Damodar Valley Corporation or by M/s Neyveli Lignite Corporation Limited were required to charge GST on the Deemed Supply.

8. In view of the above, the above five appeals filed by the appellant are rejected.