The Hon’ble High Court of Delhi vide its order dated 08.05.2023 in the matter of Alex Tour and Travel Private Limited Vs. Assistant Commissioner, CGST, Division – Janakpuri in W.P. (C) – 5722 of 2023, directed to disburse the amount of refund claim with interest, which was withheld by the Revenue on the account that the Revenue proposes to file an appeal against the order of the Appellate Authority sanctioning the refund claim.  The Hon’ble Court was also unable to accept that the Revenue can ignore the orders passed by the appellate authority mainly on the ground that it proposes to file an appeal.

The Petitioner filed the writ petition before the Hon’ble High Court seeking directions to implement the Order-in-Appeal No. 120-123/2022-23 dated 28.07.2022, 114-115/2022-23 dated 28.07.2022 and 262/2021-22 dated 08.02.2022 passed by the Ld. Additional Commissioner, CGST Appeals-II, Delhi and expeditiously grant refund of Rs. 2,62,01,727/- to the Petitioner along with applicable interest.

Facts of the Case: –

• The petitioner filed refund applications, all dated 13.04.2021, claiming refund of unutilised Input Tax Credit, amounting to Rs. 46,38,276/- for the financial year 2018-19. Thereafter, on 14.04.2021, the petitioner filed an application seeking refund of the unutilised Input Tax Credit, amounting to Rs. 2,15,63,451/- for the period 2019-20.
• That the refund claim of the petitioner was rejected on the ground that the services provided by the petitioner were intermediary services and did not qualify for export of services. The respondent also raised an issue regarding non-furnishing of Foreign Inward Remittance Certificate (FIRC).
• Though, according to the petitioner, it was not feasible to co-relate invoices with separate FIRCs and a consolidated FIRC would be sufficient to claim the refund for the unutilised Input Tax Credit.
• Being aggrieved by the orders dated 14.06.2021 passed by the adjudicating authority under Section 54(5) of the CGST Act, 2017, the petitioner filed appeals before the Appellate Authority.
• The appellate authority allowed the said appeals preferred against the orders dated 14.06.2021 by three separate orders; Order-in-Appeal No. 262/2021-22 dated 08.02.2022 for the period October, 2019 to March, 2020; Order-in-Appeal No. 114-115/2022-23 dated 28.07.2022 for the period April, 2019 to September, 2019 and Order-in-Appeal No. 120-123/2022-23 dated 28.07.2022 for the period 2018-19.
• It was found by the Appellate Authority that ‘As regards discrepancy related to FIRC observed in the impugned order I find force in the contention of appellant in their case of voluminous transaction of export of services to customers located outside India transaction wise FIRC is not feasible nor it is intended by law.the services rendered by Appellant qualify as an export of service in accordance with Section 2(6) of the IGST Act. Hence, rejection of subject four refund claims by the adjudicating authority in the impugned orders are without appreciating the facts of the matters and are not maintainable in law and liable to be set aside.’
• The petitioner again filed Form GST RFD-01 on 19.02.2022, 23.08.2022 and 10.11.2022 for grant of refund along with interest. Despite the fact that the petitioner has succeeded before the appellate authority, the respondent did not process the petitioner’s claim for refund and issued Deficiency Memos and Show Cause Notices, to which the petitioner did not respond.

It was submitted on the behalf of the respondent that the issue raised by the respondent relates to furnishing of FIRC’s and the decision of appellate authority is erroneous.  Further, it was submitted that Revenue proposes to file an appeal against the said order as and when an appellate tribunal is constituted.  Though, it was fairly admitted that fresh applications for refund or Show Cause Notices would not be necessary, considering that the proceedings emanated from the petitioner filing applications for refund which was culminated in Orders-in-Appeals passed by the appellate authority.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that the controversy between the parties is regarding the refund of Input Tax Credit availed on inputs/input services which the petitioner claims to have used for export of service. Undisputedly, the export of services is treated as a zero-rated supply and the petitioner is entitled for refund of the Input Tax Credit under Section 16(3)(a) of the Integrated Goods and Service Tax Act, 2017.
• Further, the Hon’ble Court noted that the appellate authority also accepted the petitioner’s contention that in case of voluminous transactions of export of services to customers located outside India, transaction-wise FIRC is not feasible.
• The Hon’ble Court was also unable to appreciate the insistence on the part of the Revenue for the appellant to file fresh application for refund.
• It was found that undisputedly, the Revenue is entitled to file an appeal under Section 112 of the CGST Act, however, the said appeal is required to be filed within a period of three months. The said period has been extended as the Appellate Tribunal has not been constituted as yet.
• The Hon’ble Court was unable to accept the fact that the revenue can ignore the orders passed by the appellate authority mainly on the ground that it proposes to file an appeal, when there is no order of the Court staying the effect of the Orders-in-Appeal passed by the appellate authority.
• It was noted that the Orders-in-Appeal have not granted any interest to the petitioner and more than one year has elapsed in case of Order-in-Appeal dated 08.02.2022 and almost ten months have elapsed in respect of Orders-in-Appeal dated 28.07.2022.

The Hon’ble Court with the above observations & findings, allowed the writ petition by holding that the petitioner would also be entitled to interest.  The respondent was directed to immediately disburse the petitioner’s claim for refund along with interest as payable in accordance with law.  Though, it was clarified that this would not preclude the respondent from availing statutory remedy against the Orders-in-Appeal, if, otherwise, the respondent is entitled to do so.

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