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TMI Blog2020 (10) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 05.02 2019 (hereinafter called as the "impugned order") passed by the Assistant Commissioner, Central Goods & Service Tax Division-C, Alwar (hereinafter called as the "adjudication authority") 2. BRIEF FACTS OF THE CASE: 2.1 The appellant having GSTIN No.08AAACA0434F1ZA is engaged manufacturing and marketing of Vanaspati and Cooking Oils has filed application for refund in respect of unutilized Input Tax Credit of Rs. 1,07,18285/- for the month of November-2017 accumulated on account of Inverted Tax Structure. 2.2 Further, on scrutiny of documents submitted by the appellant, the adjudicating authority had noticed that the Tax Structure on major Input used and Final Product manufactured is same i.e. @ 5% (exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finition of Net ITC as amended by Notification No.21/2018- Central Tax dated 18 04 2018 and Notification No.26/2018-Central Tax dated 13.06.2018 since the definition of Net ITC prior to the said amendment allowed refund of both input goods and input services. Also. the learned adjudicating authority has failed to consider that amendment made in the definition of the Net ITC under Rule 89(5) of CGST Rules is not retrospective in nature. * that the adjudicating authority has grossly erred in relying on Circular No. 79/53/2018-GST dated 31.12.2019 as the said circular is against the language of Section 54(3) (ii) of the CGST Act and grossly erred in rejecting the refund claim on the ground that tax rate OQ major input and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x rate of 5%. Further, it uses 'inputs' like packaging material, job charges etc., at tax rate of 18%. The rate of tax on the goods sold by the appellant i.e. Vanaspati and cooking oils is 5% which is much less than the rates of tax on inputs like packaging material job charges and others. Thus, there is accumulation of unutilized input tax credit due to rate of 'inputs' being higher than the rate of outward supplies i.e. Vanaspati and Cooking Oils. Section 54(3) (ii) does not state that the rates of alt the inward supplies should be more than the rate on outward supplies. Accordingly. even if the rate of some of the inputs is more than the rate of tax on outward supplies and the same is leading to accumulation of credit, the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is rejected; Rs. 1,07,18,285/- should be re-credited in the electronic credit ledger of the appellant. 4. Personal Hearing in the matter was held on 31.01.2020 wherein Sh. Rahul Lakhwani, Advocate of the appellant appeared. He explained the case in details and reiterated the submissions made in their appeal memorandum. At the time of personal hearing he has also submitted the additional written submission on dated 31.01.2020 & requested to decide the case on the basis of the documents available on record He further submitted that in case their appeal is not allowed. re-credit to Electronic Credit Ledger may be allowed 5. I have carefully gone through the case records and submissions made in the appeal memorandum as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available where ITC remains unutilized even after setting off of available ITC for the payment of output tax liability. Where there are multiple inputs attracting different rate of tax, in the formula provided in Rule 89(5) of the CGST Rules, the term Net ITC cover the ITC availed on all inputs in the relevant period, irrespective of their rate of tax. Further, as per Para -14 of Circular No.79/53/2018-GST dated 31.12.2018 states as under:- Section 54(3) of the CGST Act provides that refund of any unutilized ITC may be claimed where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies). Further, section 2(59) of the CGST Act defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of business 'Input' will include anything or service used in the manufacture of goods is not legally correct and not sustainable. Thus, inputs do not include services or capital goods as part of refund of unutilized input tax credit. Accordingly, as per above legality and thus as per CGST Act and Rules clearly prohibit the refund of tax paid on input services and capital goods as part of refund of input tax credit accumulated on account of inverted duty structure. I do not find much force in the contention of the appellant and the reliance placed by the appellant in their defence is not applicable in this case. I find that the adjudicating authority has rightly passed the order and appellant is not entitled for refund of unutili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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