These six appeals have been filed before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017 by M/s Gravita India Ltd., “Saurabh”, Chittora Road, Harsuliya Mod, Diggi-Malpura Road, Tehsil-Phagi, Jaipur (Hereinafter also referred to as “the appellant”) against the Orders in Original (Hereinafter called as the “impugned orders”) passed by the Deputy Commissioner, Central Goods & Service Tax Division-F, Jaipur(Hereinafter called as the “adjudication authority”) as mentioned below:-

2.  BRIEF FACTS OF THE CASE:

2.1 The appellant filed applications for refund of unutilized ITC for the month of July 2017, August, 2017, September, 2017, October, 2017 and November, 2017 separately. On examination, it was found that the refund claims were liable to be rejected on the various reasons; therefore Show Cause Notices were issued. After considering the submissions made by the appellant, the adjudicating authority vide the impugned orders has sanctioned the refund as mentioned at column 4 of the table given in para 1 and also rejected the refund claim as mentioned at column 4 of the table given in para 1.

3.  Being aggrieved with the impugned orders, the appellant has filed these appeals.

4.  Personal hearing in all these matters was held on 21.12.2018 wherein Shri Ranjan Mehta, Authorized Representative of the appellant appeared and explained the case in detail and reiterated the submission made in the grounds of appeals & requested to decide these cases on merits on the basis of facts available on records.

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 the adjudicating authority has rejected the some amount of refund claims on the various reasons. I take up the appeal and issue involved therein one by one.

6. Appeal No. APPL/JPR/CGST/JP/10/VII/18

6.1 The appellant has filed the instant appeal and shown the amount under dispute as ₹ 25,199/- (Central Tax) ₹ 25,199/- (State Tax) and ₹ 5,114/- (Integrated Tax) Totaling ₹ 55,512/-. The adjudicating authority vide the impugned order has held that refund to the extent of ₹ 5,114/-, ₹ 25,199/- and ₹ 25,199/-(totaling ₹ 55,512/-) towards IGST, CGST and SGST respectively found inadmissible and not eligible for re-credit as the claimant has not provided ITC invoice/documents. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling Form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. These are mandatory provisions and not optional one to be exercisable at the option of the proper officer. The adjudicating authority can follow the other recourse available in the law to disallow the Input Tax Credit but not at the time of granting or rejecting the refund.

7. Appeal No. APPL/JPR/CGST/JP/11/VIII/18

The appellant has filed the instant appeal and shown the amount under dispute as ₹ 1,37,583/- (Central Tax) ₹ 1,37,583/- (State Tax) and ₹ 5,54,558/-(Integrated Tax) totaling ₹ 8,29,724/-The adjudicating authority vide the impugned order has held that the claimant has not provided the documents/invoices in respect of ₹ 8,29,724/-(IGST Rs. 554558/-, CGST of ₹ 137583/- & SGST of ₹ 137583) and the same is being deducted from the eligible refund amount. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling Form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. These are mandatory provisions and not optional one to be exercisable at the option of the proper officer. The adjudicating authority can follow the other recourse available in the law to disallow the Input tax credit but not at the time of granting or rejecting the refund

8. Appeal No. APPL/JPR/CGST/JP/12/VIII/18

The appellant has filed the instant appeal and shown the amount under dispute as 4,52,125 (Central Tax) ₹ 4,52,125/- (State Tax) totaling ₹ 9,04,250/- adjudicating authority vide the impugned order has held that the claimant has been sanctioned excess refund claim to the extent of ₹ 3,77,758/-( Rs. CGST and ₹ 1,88,879/- SGST) which is not admissible and the same is being deducted from the eligible amount. The adjudicating authority has also held that amounting to ₹ 2,63,246/-/ (CGST) and ₹ 2,63,246/-(SGST)  found inadmissible as the claimant has not provided the relevant ITC documents on which ITC has been availed/claimed and ordered for recovery of ₹ 1,45,786/- along with interest excess sanctioned provisionally. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling Form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. These are mandatory provisions and not optional one to be exercisable at the option of the proper officer. The adjudicating authority can follow the other recourse available in the law to disallow the Input Tax Credit but not at the time of granting or rejecting the refund. The appellant has also contested that the amount can not be recovered when the re-credit was eligible and also preyed that if recovery of ₹ 1,45,786/- is allowed, then re-credit of complete ITC rejected i.e. ₹ 9,04,250/- should be allowed.

9.  Appeal No. APPL/JPR/CGST/JP/13/VIII/18

The appellant has filed the instant appeal and shown the amount under dispute as ₹ 40,039/- (Central Tax) ₹ 40,039/- (State Tax) totaling ₹ 80,078/-. The adjudicating authority vide the impugned order has held that amounting to ₹ 40,039/- (CGST) and ₹ 40,039/-(SGST) found inadmissible as the claimant has not provided the relevant ITC documents on which ITC has been availed/claimed and ordered for recovery of ₹ 8,138/- along with interest excess sanctioned provisionally. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling Form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. These are mandatory provisions and not optional one to be exercisable at the option of the proper officer. The adjudicating authority can follow the other recourse available in the law to disallow the Input Tax Credit but not at the time of granting or rejecting the refund. The appellant has also contested that the amount can not be recovered when the re-credit was eligible and also preyed that if recovery of ₹ 8,138/- is allowed, then re-credit of complete ITC rejected ₹ 80,078/- should be allowed.

10. Appeal No. APPL/JPR/CGST/JP/14/VIII/18

10.1 The appellant has filed the instant appeal and shown the amount under dispute as ₹ 40,263/- (Central Tax) ₹ 40,263/- (State Tax) and ₹ 5,668- (Integrated Tax) totaling ₹ 86,194/-. The adjudicating authority vide the impugned order has held that refund to the extent of ₹ 5,668/-, ₹ 40,263/- and ₹ 40,263/- (Totaling ₹ 86,194/-) towards IGST, CGST and SGST respectively found inadmissible as the claimant has not provided relevant ITC invoice/documents on which ITC has been availed/claimed. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling Form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. These are mandatory provisions and not optional one to be exercisable at the option of the proper officer. The adjudicating authority can follow the other recourse available in the law to   disallow the Input tax credit but not at the time of granting or rejecting the refund.

11. Appeal No. APPL/JPR/CGST/JP/15/VIII/18

11.1 The appellant has filed the instant appeal and shown the amount under dispute as ₹ 85,189/- (Central Tax) ₹ 85,189/- (State Tax) and ₹ 11,992/- (Integrated Tax) totaling ₹ 1,82,370/-. The adjudicating authority vide the impugned order has held that refund to the extent of ₹ 11,992/-, ₹ 85,189/- and ₹ 85,189/- (totaling ₹ 1,82,370/-)   towards IGST,CGST and SGST respectively found inadmissible as the claimant has not provided relevant ITC invoice/documents on which ITC has been availed [claimed. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling Form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. These are mandatory provisions and not optional one to be exercisable at the option of the proper officer. The adjudicating authority can follow the other recourse available in the law to disallow the input tax credit but not at the time of granting or rejecting the refund.

12. I find that in all the six appeals, the main issue involved is that whether the re-credit of ITC of inputs was to be allowed to the extent, the refund claims were rejected as the  appellant had already debited the entire ITC of inputs in their electronic ledger that had been claimed in the refunds claims and some amount out of that amount, were rejected by the adjudicating authority. The adjudicating authority has not allowed the re-credit on the grounds that the claimant has not provided ITC invoice/documents. The appellant has contested that Rule 93 as well as Circular 17/17/2017 very clearly say that whenever any refund is rejected by the proper officer then he has to make necessary arrangement by filling form PMT-03 and RFD-01B to grant the re-credit of rejected amount to them. The appellant has also contested that the proper officer did not allow the proper opportunity of being heard to the appellant as the issue of not allowing re-credit was not given under the Show Cause Notice. The appellant could not present his side against such view of the proper officer which is against the principle of natural justice. Rule 93 of CGST Rules, 2017 stipulates as under;

RULE 93. Credit of the amount of rejected refund claim. – (1) Where any deficiencies have been communicated under sub-rule (3) of rule 90, the amount debited under sub-rule (3) of rule 89 shall be re-credited to the electronic credit ledger.

(2)  Where any amount claimed as refund is rejected under rule 92, either fully or partly, the amount debited, to the extent of rejection, shall be re-credited to the electronic credit ledger by an order made in FORM GST PMT-03*.

Explanation. – For the purposes of this rule, a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking in writing to the proper officer that he shall not file an appeal.

Further para 2.10 of CBEC’s Circular No. 17/17/2017-GST dated 15.11.2017 stipulates as under:

2.10 After the refund claim is processed in accordance with the provisions of the CGST Act and the rules made thereunder and where any amount claimed as refund is rejected under rule 92 of the CGST Rules, either fully or partly, the amount debited, to the extent of rejection, shall be re-credited to the electronic credit ledger by an order made in FORM GST PMT-03. The amount would be credited by the proper officer using FORM GST RFD-01B (as notified in the CGST Rules vide notification No. 55/2017-Central Tax, dated 15-11-2017) subject to the provisions of rule 93 of the CGST Rules.

12.1  From the above provisions of law, it can be seen that the adjudicating authority was required to allow the re-credit of the amount already debited to the extent of rejection, but the adjudicating authority has not allowed the re-credit. The above provisions do not stipulate that in the case of non submission of invoices etc., the re-credit should not be allowed. Thus, I hold that the impugned order to the extent of not allowing the re-credit of the amount already debited by the appellant, to the extent of rejection without allowing the proper opportunity to present his case is not legally correct and therefore, I set aside the impugned orders to that extent and direct the adjudicating authority to allow the appellant to present his case regarding not allowing re-credit of the amount already debited to the extent of rejection.

13.  Further, the department is free to take appropriate action as per law to recover the ITC of inputs if the appellant had availed ITC on inputs without having proper documents/invoices etc.

14. As regards the recovery of Rs,1,45,786/- and ₹ 8,138/- in respect of the excess amounts sanctioned provisionally for the refund claim file for the month September, 2017 and October, 2017 respectively, the appellant has contested that amount cannot be recovered when the re-credit was admissible. The contention of the appellant is not acceptable as sanction of refund in cash and allowing of re-credit in the electronic register cannot be considered as same thing. Since, the amount was excess sanctioned in cash; the same is recoverable in cash along with interest. However, the re-credit to the appellant is admissible.

15. The above six appeals filed by the appellant are disposed off in the above manner.