Appellate authority dismisses appeal on time-barred ITC refund claim

The appellate authority upheld the decision of the adjudicating authority, ruling that the appellant's refund claim for accumulated Input Tax Credit (ITC) related to goods exported without tax payment was time-barred. Despite the appellant's argument of an extended deadline due to COVID-19, the authority determined that the claim should have been filed within two years from the relevant date as per the CGST Act, 2017. Consequently, the appeal was dismissed, affirming the rejection of the refund application.

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Issues Involved:
1. Relevant date for filing of refund claim of accumulated ITC in case of goods exported out of India without payment of tax.
2. Whether the refund claim filed by the appellant is time-barred as per the provisions of Section 54 of CGST Act, 2017.

Detailed Analysis:

Issue 1: Relevant Date for Filing of Refund Claim of Accumulated ITC in Case of Goods Exported Out of India Without Payment of Tax

The appellant argued that the relevant date for filing the refund claim should be calculated based on the unamended clause (e) of sub-section (14) of Section 54 of the CGST Act, 2017. The appellant maintained that the end of the financial year in which the refund claim arises should be considered as the relevant date.

However, the adjudicating authority and the concerned division contended that the relevant date should be calculated as per clause (a) of Explanation 2(2) of sub-section (14) of Section 54 of the CGST Act, 2017. This clause specifies that in the case of goods exported out of India, the relevant date is the date on which the ship or aircraft leaves India.

The appellate authority found the revenue's contention legally correct and justified. The unamended clause (e) cited by the appellant applies only to refunds of unutilized input tax credit in respect of inverted duty structures, not to exports without payment of tax.

Issue 2: Whether the Refund Claim Filed by the Appellant is Time-Barred

The adjudicating authority rejected the refund claim on the grounds that it was time-barred. The appellant had filed the refund application on 30-6-2020 and 29-7-2020, arguing that the deadline for filing was extended due to COVID-19 to 31st August 2020, as per Notification No. 55/2020, dated 27th June 2020.

The adjudicating authority observed that the goods were exported on 1-9-2017 and 23-12-2017. As per clause (a) of Explanation 2(2) of sub-section (14) of Section 54 of the CGST Act, 2017, the refund application should have been filed on or before 1-9-2019 and 23-12-2019, respectively. Since the refund application was filed beyond the two-year period from the relevant date, it was deemed time-barred.

The appellate authority upheld the adjudicating authority's decision, stating that the refund application was indeed filed beyond the permissible period. The appellant's argument that the deadline was extended due to COVID-19 was not accepted, as the relevant date for filing the refund claim was still beyond the two-year limit.

Conclusion:

The appellate authority concluded that the adjudicating authority rightly rejected the refund application on the grounds of it being time-barred. The appellant's contention regarding the extension of the deadline due to COVID-19 was not found to be valid. The appeal filed by the appellant was therefore rejected.

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