2022 (1) TMI 743

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....ry, 2020 Rs. 5,42,123/- 2. Brief facts of the case are that the appellant having GSTIN 08AADCE7903J1ZI has filed the application for refund under Section 54 of the CGST Act, 2017 vide refund application GST-RFD-01 with ARN No. AA0807200379253, dated 16-7-2020 for the period and amount mentioned in Para 1 above in column No. (4) & (5) for refund of IGST paid on export of goods. 2.1 Further, on examination of documents of refund claim submitted by the appellant for the period and amount mentioned in Para 1 above in column No. (4) & (5), the adjudicating authority has found refund claim inadmissible on the ground that the refund claim cannot be sanctioned in cash as per Rule 86 of CGST Rules, 2017 read with Circular No. 135/05/2020, dated 31-3-2020 and accordingly, passed the Order-in-Original in Form GST RFD-06 No. Z00807200440418, dated 28-7-2020 and rejected the refund claim. 3. Being aggrieved with the impugned Order Z00807200440418, dated 28-7-2020, the appellant has filed the appeal on 23-11-2020 for the disputed period and amount mentioned in Para No. 1 above in column No. (4) & (5) on the following grounds which are summarized as under :- Th....

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.... is very clear that in case of refund is filed for excess payment of tax and the said excess tax is paid by way of debit of ITC available in Electronic Credit Ledger then refund of such excess tax shall also be made by way of re-credit in Electronic Credit Ledger using Form GST PMT-03. In the current case, the Appellant has made the excess payment of Rs. 5,42,123/- by way of debit to Electronic Credit Ledger and it is eligible for refund of same. The Appellant submits that the Rule 86 of CGST Rules, 2017 have also been correspondingly amended vide CGST (Third Amendment) Rules, 2020, dated 23-3-2020 by way of insertion of sub-rule (4A) which is reproduced below : "(4A) Where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be recredited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03." The Appellant submits that even the Circular No. 135/05/2020, dated 31-3-2020 has clarified the above amendments in CGST Rules, 2017. Paras 4.2 to 4.4 of the said Circular wh....

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....nt as Input Tax Credit in electronic credit ledger," 4.4 The combined effect of the above-mentioned changes is that any such refund of tax paid on supplies other than zero-rated supplies will now be admissible proportionately in the respective original mode of payment i.e. in cases of refund, where the tax to be refunded has been paid by debiting both electronic cash and credit ledgers (other than the refund of tax paid on zero-rated supplies or deemed export), the refund to be paid in cash and credit shall be calculated in the same proportion in which the cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which application for refund has been filed. Such amount, shall be accordingly paid by issuance of order in FORM GST RFD-06 for amount refundable in cash and FORM GST PMT-03 to recredit the amount attributable to credit as ITC in the electronic credit ledger." 4. Personal hearing in virtual mode through video conference was held on 13-5-2021. Shri Keshav Gupta, Authorized Representative on behalf of the appellant has attended the personal hearing. During the personal hearing he reiterated the grounds o....

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....017, Therefore, I proceeded to decide the case on merit accordingly. 8. The relevant Statutory provision in the instant case is as under :- (A)    As per SECTION 54 of the CGST Act,2017. Refund of tax. - (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. (B)    As per RULE 89 of the CGST Rules, 2017. Application for refund of tax, interest, penalty, fees or any other amount. - (1) Any person, except the persons covered under notification issued under Section 55, claiming refund of any tax, interest, penalty, fees or any other amount paid by him, other than refund of integrated tax paid on goods exported out of India, may file an application electronically in FORM GST RFD-01* through the common portal, either directly or through a Facilitation Centre notified by the Commissioner : (C)    As per RULE 86 of CGST Rules, 2017. Electronic Credit Ledger. - (1) The electronic credit ledger shall be maintained in FO....

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....bsp;    (1A) Where, upon examination of the application of refund of any amount paid as tax other than the refund of tax paid on zero-rated supplies or deemed export, the proper officer is satisfied that a refund under sub-section (5) of Section 54 of the Act is due and payable to the applicant, he shall make an order in FORM RFD-06 sanctioning the amount of refund to be paid, in cash, proportionate to the amount debited in cash against the total amount paid for discharging tax liability for the relevant period, mentioning therein the amount adjusted against any outstanding demand under the Act or under any existing law and the balance amount refundable and for the remaining amount which has been debited from the electronic credit ledger for making payment of such tax, the proper officer shall issue FORM GST PMT-03 recrediting the said amount as Input Tax Credit in electronic credit ledger. (E)    Further, as per Paras 4.2 to 4.4 of C.B.I. & C. Circular No. 135/05/2020-GST, dated 31-3-2020 issued under F. No. CBEC-20/01/06/2019-GST reads as under : 4.2 For the refund of tax paid falling in categories specified at S. No. (i) ....

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....r than zero-rated supplies will now be admissible proportionately in the respective original mode of payment i.e. in cases of refund, where the tax to be refunded has been paid by debiting both electronic cash and credit ledgers (other than the refund of tax paid on zero-rated supplies or deemed export), the refund to be paid in cash and credit shall be calculated in the same proportion in which the cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which application for refund has been filed. Such amount, shall be accordingly paid by issuance of order in FORM GST RFD-06 for amount refundable in cash and FORM GST PMT-03 to recredit the amount attributable to credit as ITC in the electronic credit ledger. 9. I find that the adjudicating authority has rejected the refund application on the ground that the refund claim cannot be sanctioned in cash as per Rule 86 of CGST Rules, 2017 read with Circular No. 135/05/2020, dated 31-3-2020. 10. On going through the case records, as well as submissions of the appellant, I find that the appellant has filed the refund application GST-RFD-01 with ARN No. AA0807200379253, da....