These Three appeals have been filed before the appellate authority under  Section 107 of the Central Goods and Service Tax Act, 2017 by M/s Sigma Electric Manufacturing Corporation Private Ltd.,(Formerly Sigma Electric Mfg. Pvt Ltd.,) A-134-136, Road No. 12, Vishwakarma Industrial Area, 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, C.P. 21,22,23  Road No.1D, VKI Area, Jaipur (Here in after called as the “adjudication authority”) as mentioned below :-

2.  BRIEF FACTS OF THE CASE:

2.1 The appellant having GSTIN No.08AADCS9493H1ZS is a 100% Export Oriented Unit (hereinafter referred to as “the appellant) are engaged in manufacture and export of metal casting and injection molded products and accessories has filed applications for refund claim in respect of unutilized ITC accumulated on account of export of goods & services without payment of integrated tax under Section 16 (3) (a) of the Integrated Goods & Service Tax Act,  2017 (hereinafter referred to it as the IGST Act, 2017) read with Rule 96A of the CGST Rules, 2017 under the cover of Letter of Undertaking (hereinafter referred to as LUT) for the month of July 2017 August, 2017 and September, 2017. The refund claims were rejected by the adjudicating authority on the grounds that the appellant did not supply the information fall under Sub-rule (4A) or sub-rule (4B) of the CGST Rules, 2017 and in the refund claim nowhere mentioned that any supply under Rule 89(4A) of the CGST Rules, 2017 or otherwise. As per Rule 89(4A) of the CGST Rules, 2017 as amended, the information in respect of Notification No.48/2017-Central Tax dated the 18th October 2017 and rule 89(4B) of the CGST Rules, 2017 as amended,’ information in respect of Notification No.40/2017, 41/2017, dated 23rd October 2017, 78/2017 & 79/2017-Centra’ Tax (Rate) 13rd October 2017 has not been received/provided by the appellant and not followed the provisions of the circular No. 17/17/2017-GST dated 15.11.2017. The appellant has also not followed the procedure as prescribed under Section 87 of CGST Act, 2017 read with Rule 41 of the CGST Rules, 2017

3.  Being aggrieved with the impugned orders mentioned in column No.3 of above Table in Para-I, the appellant has filed these appeals on the ground that on the facts and circumstances of the case. the adjudicating authority is wrong, unjust  and erred in law in and without consideration of facts rejecting claim of refund. That the reason mentioned for rejecting claim of refund is either irrelevant to verify the claim of refund or technical in nature. The facts has duly explained but the order of reject of refund was without consideration of information and explanations submitted by the company. The’ adjudicating authority has acted in an arbitrary manner and has shown a complete disregard for the provisions of the Act, 2017 and the Rules, 2017 issued thereunder.

4  Personal Hearing in all these matters were held on 13.12.2018 and 06 03 2019 wherein Sh. Mukesh Sharma, Senior Manager and Sh. Pratik Shah, CWA & Authorized Representative of the appellant appeared. They explained the case in details and reiterated the submissions made in their appeal memorandum. At the time of personal hearing they have also submitted the additional written submission on dated 06 03 2019 & requested to decide the case on the basis of the records available. The appellant has contested the impugned orders mainly on the following grounds which are summarized as under:-

4.1 It is submitted that the Appellant had not claimed refund of accumulated ITC in respect of other inputs or input servicers used in making zero rated supply of   goods under the provision of Rule 89(4A) or 89 (4B) or both for the relevant period. The same can also be seen from the details as available on the common portal  Moreover. the Appellant had also submitted an undertaking that no refund of ITC has been claimed by the Appellant earlier in any manner whatsoever in relation to the invoices which have been submitted in the instant refund application.

4.2 Had the refund claim been filed under the any other provisions of the Act, 2017, the corresponding amount of ITC would have been reduced from the Electronic Credit Ledger for the said months.

4.3 The adjudicating authority has alleged that as per Rule 89(4A) of the Rules, 2017, the information in respect of the Notification No.48/2017-Central Tax dated 18^th October 2017 is necessary to be obtained and the same is not furnished. The appellant submitted the detailed extract of Rule 89(4A) of CGST Rules, 2017

“In the case of supplies received on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 48/2017-Central Tax dated the 18th October. 2017 published in the Gazette of India  Extraordinary, Part Il, Section 3, Sub-section (i), vide number G.S R 1305 (E) dated the 18^th  October, 2017, refund of input tax credit, availed in respect of other inputs or input services used in making zero-rated supply of goods or services or both, shall be granted” 

that the legislation has provided additional mechanism of filing the refund application in the case of supplies received on which the supplier has availed the benefit under Notification No.48/2017-Central Tax dated 18 October 2017. In this connection, it is necessary to understand the details of the Notification No.48/2017-Central Tax dated 18 October 2017

The said Notification has mentioned that the following supplies shall be treated as deemed supplies within the meaning of Section 147 of the Act, 2017

a.  Supply of goods by a registered person against Advance Authorization

b.  Supply of capital goods by a registered person against Export Promotion Capital Goods Authorization.

c.  Supply of goods by a registered person to Export Oriented Unit.

d.  Supply of gold by a bank or Public Sector Undertaking specified in the Notification No. 50/2017- Customs dated the 30th June, 2017 (as amended) against Advance Authorization.

On conjoining reading of the Rule 89(4A) of the Rules, 2017 with the Notification No. 48/2017-Central Tax-GST dated 18 October 2017, we understand that the supply of goods by a registered person to EOU shall be treated as deemed supplies under section 147 of the Act, 2017 and refund of tax paid on such supplies can either be claimed by the recipient of the goods or supplier of the said goods.

The Circular No. 14/14/2017-GST dated 06 November 2017 issued by Department of Revenue, wherein the detailed procedure has been specified in  respect of procurement of supplies of goods from Domestic Tariff Area by Export Oriented Unit/ Software Technology Park (STP) unit/ Bio Technologies Parks (BTP) Unit under deemed export benefit under Section 147 of the Act, 2017.

a.  The recipient EOU/EHTP/STP/BTP unit shall give prior intimation in a prescribed proforma in “Form-A” (appended herewith) bearing a running serial number containing the goods to be procured. as pre-approved by the Development Commissioner and the details of the supplier before such deemed export supplies are made. The said intimation shall be given to- (a) the registered supplier; (b) the jurisdictional GST officer in charge of such registered supplier; and (c) its jurisdictional GST officer

b. The registered supplier thereafter will supply goods under tax invoice to the  recipient EOU /EHTP/STP/BTP unit 

c. On receipt of such supplies, the EOU/ EHTP/STP/BTP unit shall endorse the tax invoice and send a copy of the endorsed tax invoice to- (a) the registered supplier; (b) the jurisdictional GST officer in charge of such  registered supplier; and (c) its jurisdictional GST officer.

d.  The endorsed tax invoice will be considered as proof of deemed export supplies by the registered person to EOU/EHTP/STP/BTP unit.

e.  The recipient EOU/EHTP/STP/BTP unit shall maintain records of such deemed export supplies in digital form, based upon data elements contained in ‘Form-B” (appended herewith). The software for maintenance  of digital records shall incorporate the feature of audit trail. While the data elements contained in the Form-B are mandatory, the recipient units will be free to add or continue with any additional data fields, as per their commercial requirements. All recipient units are required to enter data accurately and immediately upon the goods being received in. utilized by or removed from the said unit. The digital records should be kept updated, accurate, complete and available at the said unit at all times for verification by the proper officer, whenever required. A digital copy of Form- B containing transactions for the month. shall be provided to the jurisdictional GST officer, each month (by the 10^th of month) in a CD or Pen drive, as convenient to the said unit.

 In the light of the above procedure, the Appellant has not followed procedure, as mentioned in the above circular, to claim the benefit of deemed export under Section 147 of the Act, 2017.

5.  I have carefully gone through the case records and submissions made in the appeal memorandum as well as additional written submission submitted at the time of personal hearing on dated 06 03.2019. The adjudicating authority has rejected all the refund claims filed by the appellant and held that the appellant did not supply the information fail under Sub-rule 89 (4A) or Sub-rule 89 (4B) of the CGST Rules, 2017 and in the refund claim nowhere mentioned that any supply under Rule 89(4A) of the CGST Rules, 2017 or otherwise. As per Rule 89(4A) of the CGST Rules, 2017 as amended, the information in respect of Notification No.48/2017-Central Tax dated the 18^th October 2017 and rule 89(4B) of the CGST Rules, 2017 as amended, information in respect of Notification No.40/2017, 41/2017, dated 23^rd October 2017, 78/2017 & 79/2017-Central Tax (Rate) 13rd October 2017 has not been received/provided by the appellant and not followed the provisions of the circular No. 17/17/2017-GST dated 15.11.2017.

6.  I find that vide Para 41 of Circular No. 125/44/2019-GST dated 18.11.2019 it is clarified that certain supplies of goods have been notified as deemed exports  vide notification No 48/2017-Central Tax dated 18.10.2017 under Section 147 of the CGST Act. Further, the third proviso to rule 89(1) of the CGST Rules allows either the recipient or the supplier to apply for refund of tax paid on such deemed export supplies. In case such refund is sought by the supplier of deemed export supplies, the documentary evidences as specified in notification No 49/2017-Central Tax dated 18.10.2017 are also required to be furnished which includes an undertaking that the recipient of deemed export supplies shall not claim the refund in respect of such supplies and shall not avail any input tax credit on such supplies. Similarly, in case the refund is filed by the recipient of deemed export supplies, an undertaking shall have to be furnished by him stating that refund has been claimed only for those invoices which have been detailed in statement 5B for the tax period for which refund is being claimed and that he has not availed input tax credit on such invoices. The recipient shall also be required to declare that the supplier has not claimed refund with respect to the said supplies. The procedure regarding procurement of supplies of goods from DTA by Export Oriented Unit (EOU)/Electronic Hardware Technology Park (EHTP)Unit/Software Technology Park (STP) Unit/Bio-Technology Parks (BTP) Unit under deemed export as laid down in Circular No. 14/14/2017-GST dated 06.11 2017 needs to be complied with  Thus, the appellant being a 100% EOU was required to follow the procedure laid down in Circular 14/14/2017-GST dated 06.11 2017 which the appellant failed to do so.

7.  I find that M/s Sigma Electric Manufacturing Corporation Pvt Ltd., having GSTIN No.08AADCS9493H1ZS amalgamated with parent company i.e. M/s Sigma Electric Manufacturing Pvt Ltd., having GSTIN No.08AAXCS4352FIZW by scheme of amalgamation approved by the Company Law Tribunal Order dated 14.09.2017. As per scheme of amalgamation all statutory licenses, permission or approvals or consents, permits, quotas, rights, entitlements, licenses, tenancies, all intellectual property right including trademark, service mark, design, patents, copyrights and domain name (whether registered or not) privilege and all the benefits of al’ contracts, agreement and all other rights including lease rights,  licenses. power and liabilities of every kind and description, whatsoever as per the records of old company shall be deemed to be transferred and/ or vest in New Company. M/s Sigma Electric Manufacturing Private Ltd., got registered with effect from 09.10 2017 vide GSTIN No.08AAXCS4352FIZW, hence the registration certificate of M/s Sigma Electric Manufacturing Corporation Pvt Ltd., having GSTIN No 08AADCS9493HIZS was required to be cancelled by way of filing REG-16 mentioning reason transfer of business on account of amalgamation,  merger/demerger, sale, lease or otherwise disposed of etc.,

As per Section 87 of the CGST Act, 2017- (1) When two or more companies are amalgamated or merged in pursuance of an order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to the date  of the order and any two or more of such companies have supplied or received any goods or services or both to or from each other during the period commencing on the date from which the order takes effect till the date of the order, then such transactions of supply and receipt shall be liable to pay tax accordingly.

(2) Notwithstanding anything contained in the said order, for the purposes  of this Act, the said two or more companies shall be treated as distinct companies for the period upto the date of the said order and the registration certificates of the said companies shall be cancelled with effect from the date of the said order.

Further, as per Rule 41 of the CGST Rules, 2017 (1) – A registered person shall, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in FORM GST ITC-02 electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee:

Provided that in the case of de-merger the input tax credit shall be apportioned in the ratio of the value of assets of the new units as specified in the  demerger scheme.

Explanation- For the purpose of this sub-rule it is hereby clarified that the  “value of assets” means the value of the entire assets of the business, whether or  not input tax credit has been availed thereon].

(2)  The transferor shall also submit a copy of a certificate issued by a practicing chartered accountant or cost accountant certifying that the sale, merger, de-merger, amalgamation, ‘ease or transfer of business has been done with a specific provision for the transfer of liabilities.

(3)  The transferee shall, on the common portal, accept the details so furnished by the transferor and, upon such acceptance, the unutilized credit specified in FORM GST ITC-02 shall be credited to his electronic credit ledger.

(4)  The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account.

8.  Thus, as per provisions of Section 87 of CGST Act, 2017and Rule 41 of CGST Rules, 2017, the GSTIN of M/s Sigma Electric Manufacturing Corporation Private Ltd having GSTIN No. No.08AADCS9493HIZS was required to be cancelled after issuance of order dated 14.09.2017 of Company Law Tribunal for amalgamation and they were required to do their entire activities under the new entity i.e. M/s Sigma Electric Manufacturing Private Ltd., having GSTIN No  08AAXCS4352FIZW. As per Rule 41 of CGST Rules, 2017 they were also required to transfer their unutilized credit to the new entity. The appellant neither cancelled their GSTIN by filing FORM REG-16 with effect from the date of order for amalgamation nor transferred their unutilized credit in FORM GST ITC-02 to new GSTIN, thus failed to follow the procedure as prescribed under Section 87 of CGST Act, 2017 read with Rule 41 of CGST Rules, 2017. Since the appellant has not followed the procedure prescribed under the Act/Rules/Circular as mentioned supra, they are not entitled for refund and rightly rejected by the adjudicating authority.

9. In view of the above legal provision and discussions and findings, I hereby reject the appeals filed by the appellant and upheld the impugned orders passed by the adjudicating authority