Refund claim of ITC under GST cannot be denied solely on Technical Reasons: CESTAT [Read Order]

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the refund claim of ITC under GST cannot be denied solely on technical reasons.

The appellant, M/sVaibhav Global Limited is a 100% EOU situated at Jaipur, registered with the Department, and is engaged in the manufacture of stone-studded gold jewellery and silver jewellery etc. falling under Chapter 71 of the Schedule to the Central Excise Tariff Act, 1985. Due to the nature of export, they have taken cenvat credit on input services & inputs, and under the provision of Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.06.2012; they applied for a periodical refund. In the normal course of business, the appellant applied for a refund of Rs. 1,44,62,563/-.

The issue involved in this appeal is whether the refund claim of unutilized input service tax credit under Rule 5 of Cenvat Credit Rules have been rightly rejected in part, for Rs. 30,19,866/-.

Mr. Rajesh Chhibber the counsel for the appellant urged that the department has not disputed the fact that there was a mistake in declaring details of credit taken while filing the monthly return for the month of June 2017, which fact was brought to the notice of the department vide letter dated 04.09.2017, to which no objection was raised. Once that was so, the actual closing balance of credit for the month of June 2017 was supposed to be considered by the department as Rs.1,44,42,750/-.

The Coram of Judicial Member, Anil Choudhary has held that the denial of refund claim in part, solely on the basis that the same was to be given in respect of the closing balance of credit as declared in the return for the Month of June 2017, is not legal and proper, as a substantive benefit cannot be denied on technical reasons, all the more, when there was no such condition in Notification No.8/2016-CE (NT) dated 01.03.2016.

“Accordingly, the appeal is allowed by setting aside the impugned order and the original authority is directed to sanction the balance refund claim of Rs.30,19,866/- along with interest from three months after the date of filing of the refund claim, till the date of sanction of refund, within 45 days from the date of receipt or service of this order,” the CESTAT ordered.

To Read the full text of the Order CLICK HERE

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