This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as the “Act”) by M/s VV Enterprises,B-479, Phase-I, RIICO Industrial Area, Bhiwadi, Alwar (Rajasthan) (hereinafter also referred to as the “appellant”) against the Order-in-Original dated 13.12.2019 (hereinafter as the “impugned order”) passed by the Deputy Commissioner, Central Goods & Service Tax Division-C, Bhiwadi, Alwar (hereinafter called as the “adjudicating authority”).

2. BRIEF FACTS OF THE CASE:

2.1 The appellant having GSTIN No.08AACFV5863G1ZW are engaged in the manufacture of gear shaft, gear bevel etc., falling under Chapter heading 84834000 of GST Tariff. The appellant exported the goods to UAE/USA. The exported goods were manufactured out of tax paid on raw material. As such tax involved in the raw material amounting to ₹ 16,78,832/- (₹ 12,12,989/- +₹ 4,65,843/-) was debited on 23.11.2018 and accordingly appellant has filed refund claims vide ARN No.AA081117612236F and ARN No.AA08127876853N both dated 23.11.2018 for the period November-2017 and December-2017 under Section 54 of CGST Act, 2017.

2.2 On examination of refund applications, the adjudicating authority has observed that however, the appellant physically not submitted the supporting documents in spite of requests and reminders. As per Telephonic conversation with the assessee he was requested to submit the records, still no records have been submitted by them. I hereby reject refund filed by the appellant as they have not submitted the supporting documents in respect of the refunds filed under Rule 92(3) of CGST Rules, 2017 and Circular No.79/53/2018- GST dated 31.12.2018. Accordingly, the adjudicating authority vide impugned Order in Original No.V(Misc)07/Refund-01B/BHD-C/2-019-20 in Form RFD-06 dated 13.12.2019 has passed the order and rejected the refund claims.

4. Being aggrieved with the impugned orders dated 13.12.2019, the appellant has filed the appeal on the following grounds which are summarized as under:-

Before delving into finer intricacies of the arguments advanced, it is pertinent to first outline the nature and scope of the present inquiry. The instant matter centers around the rejection of ITC debited vide reference no 010811180230472 dated 23.11.2018 & 010811180230867 dated 23.11.2018 relating to export of goods without payment of duty.

1. Deficiency memo not issued/received

Under Rule 90 of the CGST Rules 2017 it is mandatory for the department to issue deficiency memo through the common portal electronically but we have not received any deficiency memo either through electronic mode or by post. Worthwhile to mention here that we have written various letters dated 13.12.2019. 21.02.2020, 13.06.2020, 29.06.2020 & 21.07.2020 for recrediting the debited tax amount but none of the letter was ever replied.

2. Show Cause Notice Not issued / Personal Hearing not granted before rejecting the claim-VIOLATION OF NATUARL JUSTICE:

Under Rule 92 of the CGST Rules 2017 “where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in form GST RFD 08 to the applicant, requiring him to furnish a reply in Form GST RFD 09 within a period of fifteen days of the receipt of such notice.

“Provided that no application for refund shall be rejected without giving the applicant an opportunity of being heard”.

In the instant case the proper authority has not followed the due procedure. Before rejecting the claim of refund neither notice to show cause was issued nor opportunity of personal hearing was granted. Thus, the adjudicating authority had travelled beyond the legal procedure and violated the basic principles of natural justice.

3. Rejection order is not speaking and is based on unrealistic information.

The order dated 13.12.2019 is not containing proper contents. The contents brought in the order are supported by assumptions, presumptions, conjectures and surmises. While deciding the matter the proper authority had taken the support of telephonic communication which cannot be considered as an official procedure. Moreover, he had not referred the phone number, person etc who was requested to submit supporting documents. He had mentioned as “in spite of various reminders and requests supporting documents were not submitted by us but he had not referred specific reference of letters/telephonic call on which basis the order has been passed. A casual approach in the matter based on an unrecorded /assumptive information has pushed the appellant to approach to your good honour.

5. Personal hearing in virtual mode through video conference was held on 10.03.2021. Sh.K.K.Gupta, Authorized Representative of the appellant appeared for personal hearing. Sh. Gupta reiterated the grounds of appeal and explained the case in details. He submitted that the appellant had uploaded all the supporting documents while filing of said refunds claim, however if there was any deficiency noticed, deficiency memo should have issued or show cause notice should have served but nothing was done on the part of adjudicating authority before rejection of refund. Further, the appellant never received any call from the adjudicating authority or by department for requiring documents. Therefore, principle of natural justices in this case have not been followed. In view of above, he requested for early decision.

6. I have gone through the facts of the case and the written submissions made by the appellant in their appeal memo as well as also oral submission at the time of personal hearing and accordingly I proceeded for deciding the appeal.

7. I find that the adjudicating Authority has rejected the refund claims of the appellant which was filed on account of export of goods/services without payment of tax (accumulated ITC). The Adjudicating Authority has stated the following reason in RFD-06.

“ that however, the appellant physically not submitted the supporting documents in spite of requests and reminders. As per Telephonic conversation with the assessee he was requested to submit the records, still no records have been submitted by them. I hereby reject refund filed by the appellant as they have not submitted the supporting documents in respect of the refunds filed under Rule 92(3) of CGST Rules, 2017 and Circular No.79/53/2018-GST dated 31.12.2018.”

8. In this context, appellant submitted that they had uploaded all the supporting documents while filing of refund claims. The appellant in the instant matter has taken main plea in appeal memo that the rejection order has been passed without issuing of show cause notice and without affording personal hearing. Further, he also stated that no deficiency memo issued and also no show cause notice/ opportunity of personal hearing granted before rejecting the claims which violate the principle of natural justice.

In their support the appellant further referred the Rule 90 and 92 of CGST Rules,2017 which are as under:-

Rule 90 of the CGST Rules 2017- it is mandatory for the department to issue deficiency memo through the common portal electronically but we have not received any deficiency memo either through electronic mode or by post.

Rule 92 of the CGST Rules 2017 -where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in form GST RFD 08 to the applicant, requiring him to furnish a reply in Form GST RFD 09 within a period of fifteen days of the receipt of such notice.

I also find that as per SECTION 75 of the CGST Act,2017. General provisions relating to determination of tax. –

(1) ….

(2) ….

(3) ….

(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.

(5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing :

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.

9. On perusal of records, I find force in the appellant’s plea that the said impugned order was passed without issue of deficiency memo in GST Form -03 and also without issue of RFD-08 without being heard to him. Further, it is also provided in Rule 92(3) of CGST Rules, 2017 that no application for refund shall be rejected without giving the applicant an opportunity of being heard.

10. Further, I find that the adjudicating authority while rejecting the refund claims of the appellant neither deficiency memo in Form GST RFD-03 nor show cause notice in Form RFD-08 has been issued and also any relevant provisions of law/rules for rejection of their refund claims has been discussed. I also find that non-passing of speaking order indeed amount to denial of natural justice. Before passing of order atleast deficiency memo and show cause notice and at least speaking order should have been passed by giving proper opportunity of personal hearing in the matter to the appellant and detailing factors leading to rejection of refund claims. Such order is not sustainable in the eyes of law.

11. In view of the above legal provisions provided in CGST Act and Rules made thereunder it would be appropriate at the part of adjudicating authority to provide the proper opportunity of being heard to the appellant and pass of fresh speaking order accordingly impugned order is set aside.

12. The appellant is also directed to submit all relevant documents to the adjudicating authority and the claims will be processed by the adjudicating authority as per the provisions and procedure as prescribed under CSGT Act, 2017 and CGST Rules as stated above.

13. Accordingly, the appeal is disposed off in above manner.