Order Date – 04 March 2024

Parties: ESL Steel Limited (earlier known as Electrosteel Steels Limited Vs Principal Commissioner, Central Goods and Service Tax & Central Excise, District-Ranchi., Chief Commissioner, Central Goods and Service Tax & Central Excise, Ranchi Zone, Patna, Assistant Commissioner, Central Goods and Service Tax & Central Excise, Division-I, Bokaro

Facts –

• The Petitioner, ESL Steel Limited, availed ITC on the competition cess paid by  them on its input coal. Major output of the petitioner were products on which compensation cess was not payable and ITC remained unutilized in credit ledger. They filed a refund application on 13.03.2020 on SEZ and direct export.
• On 15.07.2020, GST-RFD-08 i.e., SCN for rejection of refund was issued to the petitioner. On 30.07.2020, date was fixed for personal hearing and also for filing show-cause reply. The petitioner filed its reply to SCN on 31.07.2020 itself; however, GST-RFD-01 was issued rejecting the claim of refund of petitioner on the ground that petitioner did not respond to SCN.

Issue –

• Whether the order and show cause notice without providing any opportunity of hearing is valid?

Order –

• The Divisional Becnh of Hon’ble High Court observed that the refund application cannot be rejected without hearing the applicant (petitioner herein) and in the instant case, admittedly; the rejection order dated 31.07.2020 (Annexure-6) has been passed without providing any opportunity of hearing to the petitioner.
• Master Circular No. 1053/02/2017-CX dated 10.03.2017 issued by the Government of India speaks for giving personal hearing to the Assessee after receiving the reply to SCN; however, in the case at hand the SCN itself gave the date of P.H. before the expiry of 15 days from the date of receipt of SCN; which is admittedly; premature. Further the Adjudicating Authority was in so hurry that it passed the order on the very next date.
• Further, it transpires that the impugned rejection order of refund is also non-speaking order i.e., without recording any reasons, though the same is mandatory under Rule 92(3) of the Rules, 2017. It would transpire that there is no DIN quoted on those Notice/Order, and as such those Notice/Order are invalid and deemed to have never been issued as per the Circular No. 122/41/2019-GST dated 05.11.2019 and Circular No. 128/47/2019-GST dated 23.12.2019, therefore the entire subsequent proceedings are null and void.
• Hence it is crystal clear that principles of natural justice have not been followed in the instant case and the writ application is allowed.