TaxTMI 
TaxTMI 
2021 (1) TMI 1221
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....d to as "the adjudicating authority or Proper Officer"). As the common issue is involved in all these two appeals, therefore, I take up the same for decision simultaneously. Sl. No. Appeals No. Order-in-Original No. & date (Impugned Order) Period of Dispute Refund rejection amount (Rs.) 1 APPL/JPR/CGST/ JP/29/VIII/19/ RFD/37/GST/Div-C/Ref-Final/2019, dated 22-5-2019 Aug., 2018 6,09,718/- 2 APPL/JPR/CGST/ JP/42/XI/19 CGST DIV-F/69/PV/19-20, dated 6-8-2019 March, 2019 9,94,169/- 2. Brief facts of the case : 2.1 The appellant having GSTIN No. 08AAECP5113E1ZR is engaged in manufacturing and supply of Solar Panel has filed application for refund in respect of unutilized Input Tax Credit of Rs. 10,61,774/- for the month of August, 2018 on account of ITC accumulated due to Inverted Tax Structure. Out of which Rs. 4,52,056/- has been sanctioned and Rs. 6,09,718/- has been rejected. Further, the appellant has also filed application for refund in respect of unutilized Input Tax Credit of Rs. 19,88,667/- for the month of March, 2019 on account of ITC accumulated due to Inverted Tax Structure. Out of which Rs. 9,94,498/- has been sanctioned and Rs. 9,94,169/- has bee....
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....ejection or in case they file an appeal, the same is finally decided against the claimant, as has been laid down in Rule 93 of the CGST Rules, 2017. Therefore I order not to re-credit the rejected amount in electronic credit ledger of the claimant using Form GST RFD-01B." Accordingly, through RFD-06, the adjudicating authority has rejected the refund amounting to Rs. 6,09,718/- and 9,94,169/- respectively. 4. Being aggrieved with the impugned orders, the appellant has filed appeals mainly on the following grounds that :- - that the appellant is engaged in business of manufacturing and supply of Solar Panel falling under HSN 8541 which attract 5% GST. The inputs, input services and capital goods procured for manufacture of Solar Panel attract GST rate ranging from 18% to 28% which results into accumulation of input tax credit. The appellant filed refund claim in respect of accumulated Input Tax Credit due to inverted tax structure for the month of August, 2018. - that the respondent then issued Show Cause Notice No. V(CGST)/Div-C/GST Refund/PV Power/55/19/1125, dated 22-4-2019 and V(CGST)D....
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....ions of sub-sections (3) and (4) of Section 9; (c) the tax payable under the provisions of sub-sections (3) and (4) of Section 5 of the Integrated Goods and Services Tax Act; (d) the tax payable under the provisions of sub-sections (3) and (4) of Section 9 of the respective State Goods and Services Tax Act; or (e) the tax payable under the provisions of sub-sections (3) and (4) of Section 7 of the Union Territory Goods and Services Tax Act, 2017. - that the appellant submits that in the light of Section 2(62) of Central Goods and Services Tax Act, 2017 it is clear that "input tax" mean Central Tax, State Tax, Integrated Tax or Union Territory Tax charged on any supply of goods or services or both. - that the appellant further submits that in view of above mentioned Sections and on harmonious reading of above referred sections, it is clear that refund under Section 54(3) of Central Goods and Services Tax Act, 2017 is allowed in respect of unutilized Central Tax, State Tax, Integrated Tax or Union Territory Tax charged on any supply of goods or services or both, which were used to make taxable sup....
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....hrough the impugned Orders passed by the Adjudicating Authorities, I find that the Adjudicating Authorities have rejected the refund of appellant mainly on the ground that "In the light of Para 4.2 of Circular No. 59/33/2018-GST, dated 4-9-2018 I observed that the claimant is not eligible for the refund on input services and eligible for the refund on Inputs. Further, as per requirement of Para of Circular No. 59/33/2018-GST, dated 4-9-2018 the claimant has not submitted any undertaking stating that they shall not file an appeal against the rejection or in case they file an appeal, the same is finally decided against the claimant, as has been laid down in Rule 93 of the CGST Rules, 2017. Therefore I order not to re-credit the rejected amount in electronic credit ledger of the claimant using Form GST RFD-01B." Accordingly, through RFD-06, the adjudicating authority has rejected the refund amounting to Rs. 6,09,718/- and 9,94,168/- respectively as these refund claims pertains to input services/capital goods. 8. In this regard, I find that the appellant has pleaded that the tax paid on services is also covered under the definition of input tax credit as defined under Section 2(....
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....oth avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies." Also, the Rule 89(5) of the CGST Rules, 2017 provides that - "CHAPTER X REFUND 89. Application for refund of tax, interest, penalty, fees or any other amount. - xx       xx       xx [(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula :- Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC / Adjusted Total Turnover} - tax payable on such inverted rated supply of goods and services. Explanation. - For the purposes of this sub-rule, the expressions - (a) "Net ITC" shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and (b) "Adjusted total turnover" shall have the same meaning as assigned to it in sub-rule (4).]* * Amendm....
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.... include the power to give retrospective effect to the rules or any of them from a date not earlier than the date on which the provisions of this Act come into force. 13. Therefore, I find that the Central Government, in contemplation of the powers conferred by Section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), has amended the Central Goods and Services Tax Rules, 2017 by issuing the Notification No. 26/2018-Central Tax, dated 13-6-2018. 14. I find that the subject matter has also been under consideration at various judicial and quasi-judicial authorities and the recent progression in the matter is prominent to deliberate cautiously hereunder, which is not only a obiter dicta but also laid the foundation for formulation of the principles of law for the purpose of deciding the present problem before us on this issue. 15. The Hon'ble Madras High Court in the matter of M/s. Tvl. Transtonnelstroy Afcons v. Union of India (in W.P. No. 8596 of 2019 Batch etc.) [2020 (43) G.S.T.L. 433 (Mad.)], pronounces its inference in the batch of petitions on inverted duty structure and arrived at the following conclusion - (1) Section 54(3)(ii) does not....
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.... of the Act, stipulates that unless the context otherwise requires the same shall mean as under :- "2. Definitions. - xx       xx       xx (59) "input" means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business; (60) "input service" means any service used or intended to be used by a supplier in the course or furtherance of business;" 18. Further, the refund provision should be treated on a par with an exemption provision. For this principle, in W.P. No. 8596 of 2019 Batch etc. to the judgment in AC v. Dharmendra Trading Co., (1988) 3 SCC 760 the Supreme Court held that though styled as a refund of sales tax, the benefit is in the nature of an exemption or reduction of tax. Correspondingly, by relying upon the judgment of the Five Judge Bench of the Hon'ble Supreme Court in Commissioner of Customs v. Dilip Kumar, (2018) 9 SCC 1 = 2018 (361) E.L.T. 577 (S.C.) (Dilip Kumar), it is concluded by the Supreme Court that an exemption provision in a tax statute should be construed strictly and any ambiguity should be resolved in ....