Order Date – 10 March 2023

Parties: M/s. Balaji Exim Vs Commissioner, CGST and Ors.

Facts –

• The Petitioner, M/s. Balaji Exim, had filed its refund applications seeking refund of the unutilized Input Tax Credit which comprised of Integrated Goods and Service Tax in respect of goods exported.
• Show cause notice dated 04.06.2021 was issued to reject the petitioner’s refund applications indicating that a report regarding legitimacy and genuineness of the export of goods from the Customs Station, Kolkata, which were purchased by the petitioner from M/s Shruti Exports.

Issue –

• Whether the rejection of ITC is in order?

Order –

• The Divisional Bench of Hon’ble High Court observed that that the Petitioner’s refund applications have been rejected merely because of suspicion without any cogent material. There is no dispute that goods have been exported; the invoices in respect of which the petitioner claims the ITC were raised by a registered dealer; and, there is no allegation that the petitioner has not paid the invoices, which include taxes.
• The allegations of any fake credit availed by M/s Shruti Exports cannot be a ground for rejecting the petitioner’s refund applications unless it is established that the petitioner has not received the goods or paid for them.
• Hence, the petitioner would be entitled to refund of the ITC on goods that have been exported by it. The present petitions are, accordingly, allowed and the respondents are directed to forthwith process the petitioner’s applications for refund of the ITC including Cess.