Order Date – 29 November 2023

Parties: M/s.Sine Automation and Integration Pvt.Ltd. Vs Union of India & Ors.

Facts –

• The Petitioner, M/s.Sine Automation and Integration Pvt.Ltd., had made an application for refund dated 29 August 2018 for refund of the unutilized ITC on export of goods under Letter of Undertaking (LOU). 
• Though the refund was allowed, the department challenged the same and an order dated 11 October 2018 passed directing the petitioner to pay back the refund which was already sanctioned observing that it was not permissible for the petitioner to club both the periods i.e. period prior to 1 April 2018 which pertains to financial year 2017-18 and the subsequent period which falls in financial year 2018-19.

Issue –

• Whether the petitioner is entitled to refund?

Order –

• The Divisional Bench of Hon’ble High Court observed that the petitioner had canvassed the position that it was permissible for the petitioner to club both the periods and it was also so permissible under the Circular dated 31 March 2020. 
• However, from the reading of the impugned order, it appears to be quite clear that such aspect of the matter has been overlooked and / or not addressed in so far as to what has been clarified by the department itself, so as to bring the interpretation as held by Circular dated 31 March 2020 to be in consonance with what has been provided by Rule 89(4) of the CGST Rules.
• It was neither permissible for the Appellate Authority to overlook the Rule as it stands nor disregard the Circular dated 31 March 2020. The appellate authority ought to have recorded a finding on such issue. Hence the writ petition is allowed and appeal filed by the Department is restored to decide afresh considering the effect of the Circular dated 31 March 2020.