This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 by M/s Meena Service Centre, Khasra No.521, Delhi Bye Pass Road, Opp: Laxminayanpuri, Jaipur (hereinafter also referred to as “the appellant”) against the Order in Original No. RFD/104/GST/DIV-G/Ref/Final/2019 dated 26.11.2019 (hereinafter referred to as “the impugned order”) passed by the Assistant Commissioner, Central Goods and Service Tax Division-C, Jaipur (hereinafter referred to as “the adjudicating authority”).

2.  Brief facts of the case:

2.1  Brief facts of the case are that the appellant is having GSTIN 08AAXPM8002BIZO, a retail outlet of petrol and diesel for supply of Oil and Lubricant etc., The adjudicating authority has rejected the refund claim of ₹ 88,850/- filed by the assessee on account of that the appellant has claimed refund of Input Tax Credit availed on the license fee paid to M/s Indian Oil Corporation under “Any Other” (Specify) category.

2.2  Further, on scrutiny of refund application and documents submitted by the appellant, the adjudicating authority has found that the appellant claimed the refund of ITC availed on the license fee paid to M/s Indian Oil Corporation under “Any Other” (Specify) category. The adjudicating authority also found that the claimant neither exported goods/services nor their supplies fall under inverted duty structure. Further, the adjudicating authority has issued a deficiency memo in the Form RFD-03 dated 24.09.2019 and show cause notice in the Form RFD-08 on 01.11.2019 to attend the personal hearing in the matter. The appellant neither submitted any reply to show cause notice nor appeared for personal hearing in the matter. Accordingly, on the basis of available records on file, the adjudicating authority has rejected the claim vide Order in Original No. RFD/104/GST/DIV-G/Ref/Final/2019 dated 26.11.2019.

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

• that the order passed by the Ld. Astt Commissioner, CGST Dn-C, Jaipur on 19.11.2019 is entirely illegal, unjustified, against the provisions of law, facts of the case, principles of natural justice and without properly considering the submissions made by the appellant company and without giving any proper and reasonable opportunity.
• that the appellant is a retail outlet of M/s Indian Oil Corporation and registered in the state of Rajasthan having GSTIN 08AAXPM8002BIZO for supply of Oil and Lubricant ete.
• that the appellant have made outward and inward supplies of oil and lubricants and other goods i.e. PUC (pollution under certificate) and Distil water etc @ 18% under the GST Act, 2017 and license fee paid to M/s Indian Oil Corporation @ 28%.
• that the appellant has claimed refund in view of Section 54(3) (ii) of CGST Act, 2017 as the reason that the credit has accumulated due to the rate of input tax being higher of rate of output tax and therefore the claim of refund was made by the appellant.
• that due to no proper clarification and understanding the appellant ignorantly ticked the last column “Any Other” category instead of “Refund on account of ITC accumulated due to inverted tax structure”, understanding it to be a general column, this was done ignorantly and the right of appellant can not be taken away, but the assessing authority, without any verification of document and without given any opportunity, rejected the refund application which is entirely illegal, against the provision of law and against the principle of natural justice.
• that it was also submitted by the appellant that he has send an email on 10.11.2019 to assessing authority for granting some days for submission of reply of notice dated 01.11.2019 as due to the appellant is suffering from the heart attack problem, but no such opportunity was provided by the assessing authority.

4.  Personal Hearing in the matter was held on 28.09.2020 at 1200 Hrs wherein, Shri Hemant Kumawat, Advocate on behalf of the appellant, attended the personal hearing through video conference and explained the case in detail and reiterated the submission made in the grounds of appeal. He further requested to decide the case at the earliest.

5.  I have carefully gone through the case records and submissions made by the appellant. I find that the adjudicating authority has rejected the refund claim of (₹ 44,425/- CGST + ₹ 44,425/- SGST) = total ₹ 88,850/- filed by the appellant on the grounds that the appellant has claimed refund of Input Tax Credit availed on license fee paid to M/s Indian Oil Corporation under “Any Other” (Specify) category and also stated that neither exported any goods/services nor their supplies fall under the category of inverted tax structure. Therefore, the accumulated input tax credit appeared not to be on account of Inverted Tax Structure and dis-allowed the refund claim.

6.  I find that the appellant is having a retail outlet of M/s Indian Oil Corporation for supply of Oil and Lubricant etc., and filed their refund claim under Section 54(3) (ii) of the CGST Act, 2017 in respect of unutilized Input Tax Credit of ₹ 88,850/- for the month of March-2018 accumulated on account of Inverted Tax Structure. Further, Appellant has also stated that due to lack of proper knowledge of rules and regulation they ignorantly ticked the last column “Any Other” Category instead of refund on account of ITC accumulated on account of Inverted Tax Structure under Section 54 (3) (ii) of the CGST Act, 2017.

7.  The relevant portion of Section 54(3) of the CGST Act, 2017 reads as under:-

“Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period

Provided that no refund of unutilised input tax credit shall be allowed in cases other than –

(i)  zero rated supplies made without payment of tax;

(ii)  where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council :

8.  As per Rule 89 (5) of   Rules, 2017 in the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-

Maximum Refund  of Amount = {(Turnover inverted rated supply of goods and services) x Net ITC/ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods and services.

Explanation:- For the purposes of this sub-rule, the expressions-

(a)  Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and

(b)  [ “Adjusted Total turnover” and “relevant period” shall have the same meaning as assigned to them in sub-rule (4).]

9.  Thus Section 54(3) of the CGST Act provides that refund of any unutilized ITC may be claimed where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies). Further, Section 2(59) of the CGST Act defines inputs as any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. Thus, inputs do not include services or capital goods. The Licence Fee paid by the appellant to M/s Indian Oil Corporation does not fall under the definition of inputs as provided under Section 2(59) of CGST Act, 2017. Further, also Licence Fee is not an input for the outward supply of lubricants, Distil water and PUC (pollution under certificate). Therefore, the refund claim filed by the appellant in the instant case does not fall under the category of refund on account of Input Tax Credit accumulated on account of “inverted duty structure” as provided under Section 54(3) of CGST Act, 2017. Thus the appellant is not entitled to refund.

10.  In view of the above discussions and findings and as per above legal provisions, the refund claim filed by the appellant does not fall under the category of refund on account of Input Tax Credit accumulated on account of “inverted duty structure” as provided under section 54(3)(ii) of the CGST Act read with rule 89(5) of the CGST Rules, 2017. Thus, I do not find any infirmity in the impugned order passed by the adjudicating authority.

Accordingly, I reject the appeal filed by the appellant.