TaxTMI 
TaxTMI 
2024 (12) TMI 570
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....ame are disposed of by this common Judgment and Order. 5. The petitioner has prayed to quash and set aside the Orders-in-Appeal dated 19th February, 2019 passed by the Commissioner (Appeals), CGST & CE, Ahmedabad and the consequential Order-in-Original dated 29th April, 2021 passed by the Additional Commissioner, CGST & Central Excise, Ahmedabad-North and show-cause notice dated 15.10.2020 for giving effect to the Order-in-Appeal. 6. The brief facts of the case are as under : 6.1. The petitioner is engaged in business of manufacture and supply of passenger cars, parts, components and engines thereof. The petitioner also exports goods without payment of Integrated Goods and Services Tax (for short 'the IGST') under the Letter of Undertaking (for short 'the LUT') in terms of Section 16 of the Integrated Goods and Services Tax Act, 2017 (for short 'the IGST Act'). 6.2. It is the case of the petitioner that prior to the coming into force the Goods and Service Tax regime, the petitioner was registered under the provisions of the Central Excise Act, 1944 and was discharging appropriate central excise duty on clearance of final products from its factory premises. For use in th....
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....ising the ITC during the aforesaid period, the petitioner possessed accumulated credit of CGST and SGST in the month of August, 2017 in the Electronic Credit Ledger. 6.7. For the month of September, 2017, subsequent to utilisation of the ITC for payment of tax, the petitioner had accumulated IGST, SGST and CGST Credit. 6.8. During the aforesaid period, the petitioner also opted to export the goods manufactured without payment of IGST under the LUT and therefore, the ITC for the said period was accumulated and consequently, the petitioner filed refund claim of accumulated ITC under Section 54 of the CGST Act read with Section 16 of the IGST Act for each month as under : Month Integrated Tax (In Rs.) Central Tax (In Rs.) State/UT Tax In Rs.) Total (In Rs.) July 2017 82,45,674 1,10,14,544 1,10, 14,544 3,02,74,762 August 2017 24,22,46,089 6,69,02,644 6,69,02,644 37,60,51,377 September 2017 76,58,08,834 30,18,80,220 30,18,80,220 136,95,69,274 6.9. The respondent No.6-Assistant Commissioner, CGST sanctioned the refund by separate orders dated 3rd May, 2018 for July, 2017, 16th May, 2018 for August, 2017 and 31st May, 20....
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....ion being Special Civil Application No.19453 of 2021. 6.14. Subsequent to the passing of Order-in-Appeal, the respondent issued an intimation of demand of tax dues vide pre-show cause notice consultation through letter dated 28.07.2020 which was duly replied by the petitioner. Thereafter, the show-cause notice dated 15.10.2020 was issued by the respondent No. 5 proposing to recover the amount of refund sanctioned for the aforesaid tax period along with interest. The petitioner filed reply to the show-cause notice stating that the Order-in-Appeal has yet to attain finality and therefore, recovery proceedings pursuant to the same cannot be initiated, however, the show-cause notice was adjudicated by the Order-in-Original dated 29th April, 2021 confirming the recovery of the refund of Rs. 53,34,51,903/- under Section 73 of the CGST Act with interest. 6.15. The petitioner by letter dated 08.09.2021 requested the respondent No. 5 not to initiate any proceedings for coercive recovery as the petitioner did not have any opportunity of preferring the Appeal against the Order-in-Appeal dated 19th February, 2019 and the petitioner is in process of preferring the Writ Petition before thi....
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.... sanctioning the refund to the petitioner as under to demonstrate that the original Adjudicating Authority after considering the provisions of Section 140 of the CGST Act has sanctioned the refund by considering the CENVAT Credit which was carried forward by the petitioner in the Form GST TRAN-1 ; JULY-Refund Rs.2,80,70,787/- Sr.No. Particulars July 2017 (In INR) A. Opening balance of Electronic Credit ledger (ECL) - 163,15,92,468 - B. ITC availed during tax period 1,36,86,453 1,82,82,319 1,82,82,319 C. Total ITC available in ECL (A+B) 1,36,86,453 164,98,74,787 1,82,82,319 D. Total tax liability for tax period 66,04,96,602 219,38,492 2,19,38,492 E. Tax paid utilizing the balance available under ECL 1,36,86,453 64,68,10,149 (Towards IGST) 2,19,38,492 1,82,82,319 (36,56,173 paid in cash) F. Balance ITC carried forward - 98,11,26,146 - August-Refund Rs. 24,15,27,719/- Sr. No. Particulars August 2017 (In INR) A. Opening balance of Electronic Credit ledger (ECL) - 98,11,26,146 - B. ITC availed during tax period 39,81,78,094 10,99,67,378 10,99,67....
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....considered the facts of the case, short question which arises for consideration in this petition is whether the transitional credit as per the form Trans-1 filed by the petitioner and accepted by the department can be considered as an opening balance in electronic credit ledger as unutilized ITC available for granting refund as per the provisions of Section 54 (3) of the CGST Act to the petitioner as per the claim made by the petitioner in form RFD-01A. 14. It would, therefore, we germane to refer to the various provisions of CGST Act. 1. Zero-rated supply" has been defined under Section 16 of the Integrated Goods and Service Tax, 2017 (IGST), which reads as under:- "Section 16. Zero rated supply.- (1) "zero rated supply" means any of the following supplied of goods or services or both, namely:- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit" Section 54 of the CGST Act provides for refund of tax sub-Section 3 of Section 54 refers to the of refund of any unutilized input tax credit at the end of tax period, which reads as und....
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....g in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula:- Refund Amount= (Turnover of zero-rated supply of goods+ Turnover of zero-rated supply of services) x Net ITC divided by Adjusted Total Turnover Where,- (A) "Refund amount" means the maximum refund that is admissible; (B) "Net ITC" means input tax credit availed on inputs and input services during the relevant period; (C) "Turnover of zero-rated supply of goods" means the value of zerorated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking; (D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:- Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in ....
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....t liberty to apply for refund before the Central Tax Authority or State Tax Authority till the administrative mechanism for assigning of taxpayers to respective authority is implemented. However, in the latter case, an undertaking is required to be submitted stating that the claim for sanction of refund has been made to only one of the authorities. It is reiterated that the Central Tax officers shall facilitate the processing of the refund claims of all registered persons whether or not such person was registered with the Central Government in the earlier regime." 16. The CBIC thereafter issued a Circular No. 59/23/2018-CGST dated 04.09.2018, whereby it is clarified that measure of the amount of refund, which is eligible to the applicant seeking refund unutilized of credit of ITC on account of zero-rated supply of goods are provided. Relevant formula as prescribed for computing unutilized amount of ITC in para 3 of the said circular is as under:- "3. System validations in calculating refund amount 3.1 Currently, in case of refund of unutilized input tax credit (ITC for short), the common portal calculates the refundable amount as the least of the following amounts....
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....stwhile regime. iii) Credit of taxes paid on stock of raw materials, work-in-progress and finished goods as on 30.06.2017. iv) Credit relating to goods exempted under the earlier regime which are taxable under the GST regime. v) Credit of in transit goods and services on which taxes are paid in the erstwhile regime and such goods and services are received in the GST regime." 18. Rule 117 of the Rules provides that if a registered person has to claim Transitional Credit under Section 140 of the CGST Act, a declaration in Form GST TRAN-1 was required to be filed within 90 days of the appointed day i.e. on or before 28.09.2017. As per the provisions of Section 140 of the CGST Act read with Rule 117 of the Rules, the transitional credit, closing balance of credit of taxes lying and shown in last return filed by the assessee prior to introduction of CGST i.e. as on 30.06.2017 will be carried forward as credit in Electronic Credit Ledger as on 01.07.2017. In view of the above, GST regime, the credit balance as on of the unutilized input tax credit in earstwhile regime as on 30.06.2017 shall be available as opening balance of unutilized input tax credit....
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....d not be applicable in the facts of the case as the petitioner is entitled to get the benefit of carried forward of CENVAT credit as on 01.07.2017 in view of the provisions of Section 140 (1) read with Section 54(3) of the CGST Act, 2017 read with Rule 89(4) and 117 of the Rules. 21. It is not in dispute that the petitioner was entitled to the refund on the zero rated supplies and only ground for allowing the appeal of the department by the CIT appeals is that no balance was available in electronic credit ledger as on the date on which the petitioner was entitled to get refund i.e. end of the month i.e. July, 2017 and August,2017 because the carried forward of CENVAT credit erstwhile regime was approved by the authority in the month of September, 2017. In such circumstances, the petitioner would never be available to utilize the carried forward of CENVAT credit, which would contrary to the provisions of Section 140 (1) of the CGST Act. 22. In view of the above analysis and foregoing reasons, the petition succeeds and is accordingly allowed. The impugned order dated 22.03.2019 passed by the Commissioner (Appeals) is hereby quashed and set aside. As a result, the co....