Sunil Enterprises vs. The Deputy Commissioner, Cgst Division-h
(Faa (First Appellate Authority), Rajasthan)

Case Law
Petitioner / Applicant
Sunil Enterprises
The Deputy Commissioner, Cgst Division-h
Faa (First Appellate Authority)
Jan 13, 2020
Order No.
TR Citation
2020 (1) TR 4160
Related HSN Chapter/s
Related HSN Code


These two appeals have been filed before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017 by M/s Sunil Enterprises, B-40, Anupama Mension-II, M. l. Road Jaipur (Hereinafter also referred to as “the appellant”) against the Orders in Original (Hereinafter called as the “impugned orders”) passed by the Assistant Commissioner, Central Goods & Service Tax Division-H, Jaipur(Hereinafter called as the “adjudication authority”) as mentioned below:-

S. No


Appeal No


Order in Original No & date (Impugned Order)


Period of dispute


Order sanctioning/ rejecting refund








37/GST/REFUND/FINAL/2018-19 Dated 17.07.18

Application for refund of unutilized ITC for the month of March’ 2018 ₹ 2,85,219/-

Refund Sanctioned Rs. 14,839/- Refund rejected ₹ 2,70,380/-



46/GST/REFUND/FINAL/2018-19/2825 Dated 13.09.18

Application for refund of unutilized ITC for the month to April 2018 ₹ 24,58,531/-


Refund Sanctioned ₹ 14,82,799/- Refund rejected ₹ 9,75,732/-


2.1 The appellant having GSTIN No.08AMXPS0057Q1ZZ have filed applications for refund of unutilized ITC for CESS for the month of March, 2018 and April 2018.  On examination, it was found that the refund claims were liable to be rejected on various reasons; therefore Show Cause Notices were issued by the adjudicating authority. After considering the submissions made by the appellant, the adjudicating authority vide the impugned orders mentioned above in Table column no.2 of Para-1, has sanctioned the refund as mentioned above in Table column no. 5 of Para-1 and also rejected the refund claim as mentioned above in Table column no. 5 of Para-1

3.  Being aggrieved with the impugned orders, the appellant has filed these appeals inter- alia on the following grounds:

(a)  That the adjusted turnover have been taken wrongly treated as total turnover. For calculating refund of CESS only turnover of CESS should be treated as adjusted turnover.

(b)  As per Circular No. 1/1/2017- Compensation Cess- that the provision of Section 16 of IGST Act 2017, relating do Zero rated supply will apply mutatis mutandis for the purpose of Compensation Cess, accordingly a suitable change in applying the formula is to be made. If the said formula is applied without changing then the result would be absurd and non usable. For taking adjusted turnover suitable change is to be made for CESS. In the light of this fact they have submitted to change formula and take adjusted total turnover of CESS for calculating Refund amount.

(c)  As per the said Circular above, no compensation Cess will be charged on the goods exported. Tobacco CESS is being charged on quantity basis. If refund is not allowed then remaining CESS will be unconsumed and will be coast to the exports. This is not in line with the principle of the said Circular.

(d)  As per Principle of Natural Justice they have exported alt the goods on which CESS is applicable, hence they are eligible for all refund of goods which are exported.

4.  Personal hearing in all these matters was held on 09.01.2019 wherein Shri Deepak Jain, CA appeared on behalf of the appellant 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 held on 09.01 2019. I find that the adjudicating authority has rejected some amount of refund claims on the various reasons.   

6. I find that the appellant has raised question on the method of calculation of refund as prescribed under Rule 89(4) of the CGST Rules 2017. Their submission that the adjusted turnover has been taken wrongly as total turnover and only turnover of CESS should be treated as adjusted turnover, cannot be accepted in terms of definition of Adjusted Total Turnover as per Rule 89(4)(E) of the CGST Rules 2017 which is produced below,

“[(E) “Adjusted Total Turnover” means the sum total of the value of-

(a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and

(b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services,”

And also,

 “(112)”turnover in State” or “turnover in Union territory” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax  is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from  the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess;”

On plain reading of the definition of Adjusted Total Turnover it is very clear that the turnover of the CESS cannot be treated as Adjusted Total Turnover. Also the definition of Adjusted Total Turnover has not been dealt within the Circular as mentioned by the appellant. The appellant request to change the formula according to the said Circular cannot be entertained, as the Rule has overriding effect on Circular and also in the said Circular nowhere it is mentioned to change the formula for Adjusted Total Turnover. Hence, I found that the submission of the appellant is not acceptable in terms of the legal provisions made under CGST Rules 2017.

7.  In view of above two appeals filed by the appellant are rejected

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