Appellant's Input Tax Credit refund denied for non-compliance with Circular procedures.

The appellant's refund claims for unutilized Input Tax Credit were rejected due to non-compliance with procedural requirements outlined in Circular No. 14/14/2017-GST. The appellant failed to follow the prescribed procedure for notifying suppliers before deemed export supplies, rendering them ineligible for the refund. Despite arguing timeliness of the refund application submission, the authorities upheld the rejection, emphasizing adherence to Circular requirements. The appeals were dismissed, affirming the adjudicating authority's decisions.

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Issues Involved:
1. Rejection of refund claims under Section 54 of the CGST Act, 2017.
2. Compliance with Circular No. 14/14/2017-GST, dated 6-11-2017.
3. Timeliness of refund application submission.

Issue-Wise Analysis:

1. Rejection of Refund Claims:
The appellant, an Export Oriented Undertaking (EOU) engaged in manufacturing and exporting jewelry, filed refund claims for unutilized Input Tax Credit (ITC) accumulated on procurement of goods and services used for export without payment of tax. The adjudicating authority rejected these refund claims on the grounds of non-compliance with procedural requirements as outlined in Circular No. 14/14/2017-GST, dated 6-11-2017. Specifically, the appellant failed to provide prior intimation in the prescribed proforma "FORM-A" containing the goods to be procured, as pre-approved by the Development Commissioner, and the details of the supplier before such deemed export supplies were made.

2. Compliance with Circular No. 14/14/2017-GST:
The primary issue was whether the appellant was required to follow the procedure prescribed under Circular No. 14/14/2017-GST. According to the circular, for supplies to EOU units, the recipient must give prior intimation in "FORM-A" to the registered supplier, jurisdictional GST officer in charge of the registered supplier, and its jurisdictional GST officer. The appellant argued that the circular's requirements were meant for the suppliers to EOUs and not for the EOU users themselves. However, the adjudicating authority and the appellate authority found that the appellant was indeed required to follow the procedure as prescribed and had failed to do so, making them ineligible for the refund.

3. Timeliness of Refund Application Submission:
The appellant contended that the refund application for July 2017 was filed within the stipulated two-year period as provided under Section 54(14)(b) of the CGST Act. The adjudicating authority rejected the refund on the ground that the date of filing was considered as the date of submission of the reply in compliance with the defect memo, which was dated 11-9-2019, whereas the original refund application was filed on 22-7-2019. The appellate authority upheld the adjudicating authority's decision, stating that the appellant's contention lacked merit and did not alter the outcome.

Conclusion:
The appellate authority concluded that the appellant failed to comply with the procedural requirements outlined in Circular No. 14/14/2017-GST, which was necessary for claiming refunds under deemed export provisions. The appellant's reliance on case law was found to be inapplicable due to differing facts. Consequently, the appeals filed by the appellant were rejected, and the impugned orders passed by the adjudicating authority were upheld.

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