M/S LSI INDIA RESEARCH AND DEVELOPERS PVT LTD v. ASSISTANT COMMISSIONER OF CENTRAL TAX

Brief Facts of the Case:-

2. The appellant is a STPI registered unit and engaged in zero rated supply of services i.e., Export of services. The appellant had filed a refund claim for Rs. 6,87,02,857/- for the period from - 5 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR October’ 2017 to March’2018 before the proper officer for refund of unutilized ITC on export of services without payment of IGST under Section 54(3)(i) of the CGST Act read with Rule 89 of the CGST Rules. On verification of the supporting documents submitted by the appellant, the proper officer had issued SCN dated 05.08.2019 on account of the following grounds- I. On perusal of the statement 3 and FIRC details, the refund claim has been filed based on invoices raised during the relevant period instead of the aggregate of the payments received during the relevant period for zero-rated supply of services. Hence, the refund claim is liable to be rejected. II. The input Credits availed was verified from GSTR- 2A and Annexure-A of the relevant period and it was observed that the assessee has included more no. of invoices in their Annexure-A than GSTR-2A. Hence, the invoices which were not reflecting in GSTR-2A were called for from the assessee. III. Further, on re-conciliation, it was evident that some purchase invoices were not reflecting in GSTR-2A, but some purchase invoices related to same assessee for the same period was showing in GSTR-2A. It establishes that the purchase which has been taken as ITC by the assessee but not showing in GSTR-2A will not be considered as supply because the same invoices has not been verified by the supplier on the common portal. IV. Further, as per See 37(1) and (3) of CGST Act- 2017: "Any registered person, who has furnished the details under sub- section (1) for any lax period, - 6 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR and which have remained unmatched under section 42 or section. 43, shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may he prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in due return to be furnished for such tax period. As per the provisions of CGST Act, 2017 the time limit for rectification of return has been lapsed and hence supplier cannot issue debit/credit note to rectify the same. Hence, the same would, not. be considered as supply and not eligible for Input Tax Credit. V. Further, it was also evident that some supplier of the assessee were having two GSTINS, one is NON-SEZ and 2nd is SEZ. The outward supplies made with Non-SEZ supply GSTIN number is not reflecting in GSTR-2A, hence, the same cannot be considered for ITC and the total ineligible input tax credit as per the above observation will be Rs. 53,63,004/-.

3. The appellant had filed their reply to the show cause notice in Form RFD-09 dated 11.08.2019 wherein they had inter-alia stated as follows: (cid:1) In reply to the observation regarding claim on basis of realization or invoice, assessee had submitted that the export and realization statement 'Statement-3' as operational in the GSTN portal has been declared on invoice basis. This is owing to a technical limitation whereby said statement has been Jinked to the filed - 7 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR GSTR-1 return and cannot be filed in absence of linking to specific invoices raised during the period of refund claim. (cid:1) Further, on the observation w.r.t. supplier filed the return for the relevant period but did not show as outward supplies, assessee had submitted that, for such invoices which are not appearing, copies of invoices have been duly provided along with the refund claim. This is despite the fact that assessee could have omitted invoices for supplies reflecting in GSTR2A as per the Circular No.59/33/2018- GST dated 4th September 2018.

4. The proper officer after according PH to the appellant on

21.01.2020 had rejected the refund claim vide impugned order on the following grounds: (cid:1) From the statement-3 w.r.t export invoice IND-008/17-18, IND-009/17-18 and IND-010/17-18 the amount has been realized during the month of Dec-2017 and Feb-2018 but while verification of FIRCs, it is observed that the amount declared in statement-3 does not tally with the amount mentioned in FIRC. Hence cannot be considered as zero- rated supply for the relevant period. (cid:1) The other allegation in the notice is that supplier has filed the return for the relevant period but have not shown as outward supplies. Hence cannot be considered as supply and not eligible for Input tax Credit. In this regard assessee has submitted the invoice copy which is not shown in their GSTR-2A. I am of the opinion that as the supplier did not confirm the supply made for Rs.53,63,004/- in their valid return for the relevant period, hence as per sec 42(5) of CGST Act-2017 the same shall be added into their outward - 8 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR tax liability of the assessee and the same cannot be considered for refund. Grounds of Appeal:

5. Aggrieved by the impugned order dated 24.02.2020 wherein the refund claimed was rejected, the appellant has filed the instant appeal vide APL-01 dated 29.07.2020 along with grounds of appeal inter-alia stating the same facts as stated in RFD-09 dated

11.08.2019. Personal Hearing:

6. Personal Hearing was accorded to the appellant on 20.10.2022. Sh. Rakesh KR, CA, Authorized Representative has appeared for PH through virtual mode and reiterated the submissions made in the Grounds of Appeal memorandum. Findings:

7. I have examined the records in this case including APL-01 (filed manually) dated 29.07.2020, Grounds of Appeal enclosed to the APL01, impugned OIO NO. 72/2019-20 dated 24.02.2020 and SCN dated 05.08.2019, RFD-09 and also the submissions made during the personal hearing.

8. I find that the proper officer has rejected the refund claim filed by the appellant for refund of unutilized ITC on zero rated supply of services (export without payment of tax) for the period October’ 2017 to March’2018 for an amount of Rs. 6,87,03,857/-. The main grounds on which the refund claim was rejected in the impugned order are that:- I. From the statement-3 w.r.t export invoice IND- 008/17-18, IND-009/17-18 and IND-010/17-18 the amount has been realized during the month of Dec- - 9 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR 2017 and Feb-2018 but while verification of FIRCs, is observed the amount declared statement-3 is not tally with the amount mentioned in FIRC. Hence cannot be considered as zero-rated supply for the relevant period. II. The other allegation in the notice is that supplier has filed the return for the relevant period but have not shown as outward supplies. Hence cannot be considered as supply and not eligible for Input tax Credit. In this regard assessee has submitted the invoice copy which is not shown in their GSTR-2A. I am of the opinion that as the supplier did not confirm the supply made for Rs.53,63,004/- in their valid return for the relevant period, hence as per sec 42(5) of CGST Act-2017 the same shall be added into their outward tax liability of the assessee and the same cannot be considered for refund.

9. On the first issue of claiming refund on invoices raised instead of FIRCs, I find that the proper officer has held that 3 invoices raised during the period Oct’2017 and Mar’2018 have been realized during the relevant period, however, the Turnover of zero- rated supply declared in Statement-3 is not tallying with the amount mentioned in FIRC In the Grounds of Appeal, the appellant has submitted that the refund claim has been filed based on payments received during the relevant period which is in conformity with the clause (D) to sub-rule (4) to the rule 89 of the CGST Rules. They have submitted the summary sheet evidencing the computation of turnover of zero-rated supply for the relevant period. Further, they have submitted that statement 3 as operational in GSTN portal, contains details of invoices raised during the relevant period. This is owing to the fact that foreign - 10 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR currency received during the impugned periods pertains to invoices raised during pre-GST periods and hence, the same cannot be disclosed in statement-3 as filing of the statement 3 is linked to filed GSTR-1. Therefore, Invoices were shown in the statement 3 due to technical limitation in the system as the same was linked to GSTR-1 filing. Therefore, invoices were shown but as per the calculations provided for arriving at turnover of zero- rated supplies and net ITC eligible, they had only showed the realization under FIRCs during the claim period. Hence, no infirmity has been committed by them. It is purely, a technical limitation and therefore not to be taken cognizance as the refund had been claimed correctly,

10. In the light of the above, the issues for decision are: (a) whether the claim for refund had been filed based on invoices or FIRCS realized during the claim period? And whether the technical limitation articulated by the appellant in his reply to SCN and also in the grounds of appeal are correct? (b) whether the turnover of zero-rated supply of services can include value of FIRCs (export proceeds realization) of invoices raised during service tax regime or not? The facts narrated are not in denial from either side.

11. As regards to the first issue of claiming refund based on invoices and not on the basis of FIRCs, I find that the reply furnished by the appellant before proper authority was not considered and no reasoned findings were adduced in the impugned order rebutting the submissions made by the appellant before the proper officer. The proper officer has not touched upon the issue in the findings in the impugned order except for a liner in the impugned order. More as an obiter dictum i.e., a passing remark without substantiation. The core submission of - 11 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR appellant that it was only on account of technical limitation in reflecting the FIRCs in the statement 3 submitted along with the claim, the invoices were reflected along with FIRCs which is also admitted by the proper officer in SCN issued. Therefore, on the issue of reflecting invoices instead of FIRCs for claiming refunds is adjudged as purely the requirement under the system and as such the appellant has only considered the FIRCs realized calculation of turnover of zero-rated supplies during the claim period.

12. On the substantive issue of considering the FIRCs realized under GST regime of invoices raised during legacy law. I observe that the appeal involves refund of ITC unutilized for the period July’ 2017 to Sep’ 2017. Admittedly, the appellant is a STPI unit and engaged in zero rated supply of services (export of services) without payment of appellant has included invoices which were raised during legacy regime and proceeds have been realized during the impugned period. In terms of Rule 89(4)(D) of the CGST Rules, 2017 for the purpose of turnover of zero-rated supply of services means 'the aggregate of the payments received during the relevant period for zero rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero rated supply of services for which the supply of services has not been completed during the relevant period'.

13. I find from the definition of turnover of zero-rated supply of service as above, it is apparent that it includes aggregate payment received during the relevant period for zero rated supply of services------. Conceptually zero-rated supply has been defined under Section 16(1) of the IGST Act, 2017 which includes export - 12 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR of goods and services and also supplies made to SEZ. By extension, the turnover of zero-rated supplies shall only be limited to supply of services under GST regime in view of the wordings / terminology coined under the provisions ibid. The relevant point is whether the export of services made under service tax regime can be considered as zero-rated supplies? I find that the export of services definition is same for both the regimes except the wordings of zero-rated supplies / export of services. Therefore, the export of services covered under the invoices raised during the legacy law and proceeds realized during the GST regime partake the character of zero-rated supplies after the change in the taxation regime legacy to GST law. The CENVAT accumulation if any during the legacy period is no longer est after 01-07-2017 and the CENVAT credit partake the character of ITC once the CENVAT credit is transitioned into GST regime under sec 140 of the CGST Act 2017. The exporter cannot retain the CENVAT credit after 01-07-2017 in as much as the refund of the same cannot be allowed at that point of time unless the export proceeds are realized. The relevant date for claiming refund of unutilized credit is linked to the date of realization of export proceeds in the case of export of services. Once the CENVAT credit is transitioned, the same loses the character under CENVAT category and as such no refund can be claimed in the absence of FIRCs. Notwithstanding the above, I find that there is no dispute that what has been sought as refund is only ITC unutilized for the period July 2017 to September 2017 under Section 54 of the CGST Act and not CENVAT credit. Therefore, the transitional provisions under sub-sections 2, 3 and 4 of Section 142 of the CGST Act relied upon by the proper officer have no application to the facts of the present case as the said sub-sections deals with refund of CENVAT sought under legacy regime. Drawing reference to such provisions is totally uncalled for. There are no - 13 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR transitional provisions governing the transition of value of services exported as the GST law envisages only transition of credit held in balance as on 01-07-2017.

14. I find that the nature of export of services under legacy regime and also zero-rated supplies under GST regime are pari materia except for the words. Secondly, by statute itself, the relevant date for claiming the refund of ITC unutilized on export of services under legacy regime and also zero-rated supply of services under GST regime is linked to the receipt of export proceeds in freely convertible foreign currencies. It is apparent that the legislative intent is to synchronize the provisions so as to ensure continuity in extending the export benefits to the stakeholders. The regime changes and transitional provisions are framed in such a manner to ensure continuity of the beneficial provisions to the exporters. If the intention of legislature was to curtail the inclusion of value of the invoices raised during legacy regime and export proceeds realized during GST regime, the turnover of zero-rated supply of services could have been limited to the invoices raised during GST regime as in the case of zero-rated supply of goods. Refund of unutilized ITC on export of services is beneficial legislation to the exporters and the same cannot be denied/restricted on account of such change of regime and much less to the detriment of the interest of the exporters. The core idea of allowing refund of unutilized ITC on export of services is to pay back / refund the taxes suffered by the exporter in procurement of inputs/input services used for making export of services. Further, it is also intended not to export taxes so that the services exported will be competitive internationally.

15. Adverting to the above, I find that the order of the proper officer denying inclusion of the export proceeds realized during Oct' 2017 to March’ 2018 covered in the invoices raised during - 14 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR legacy regime is not supported by any of the provisions relied upon in the impugned order. Therefore, I hold that the value of the FIRCs realized during the relevant period shall be included for calculation of turnover of zero-rated supply of services under Rule 89(4)(D) of the CGST Rules, 2017 for arriving at the net ITC eligible for refund.

16. With regards to Second issue that the supplier has filed the GSTR-1 return for the relevant period but have not shown the invoices on which ITC was availed by the appellant during the claim period, I find that notwithstanding the elaborate submissions in GOA and reliance on various case laws in support of the above GOA, the CBIC has recently issued Circular No. 183/15/2022 dated 27.12.2022 wherein it has been clarified that in respect of invoices not auto populated in GSTR-2A for the FY 2017-18 and 2018-19, ITC is allowable based on declaration of supplier and the circular has been made applicable to appeals pending on such issues. However, it is also clarified in the circular that such availment of ITC not auto populated under GSTR-2A during the above said FY is subject to conditions laid down under Para 4 of the circular. For the sake of clarity, the circular is reproduced as under- Subject: Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19-reg. Section 16 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act") provides for eligibility and conditions for availing Input Tax Credit (ITC). During the initial period of implementation of GST, during the financial years 2017- 18 and 2018-19, in many cases, the suppliers have failed to furnish the correct details of outward supplies in their FORM GSTR-1, which has led to certain deficiencies or discrepancies in - 15 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR FORM GSTR-2A of their recipients. However, the concerned recipients may have availed input tax credit on the said supplies in their returns in FORM GSTR-3B. The discrepancies between the amount of ITC availed by the registered persons in their returns in FORM GSTR3B and the amount as available in their FORM GSTR-2A are being noticed by the tax officers during proceedings such as scrutiny/ audit/investigation etc. due to such credit not flowing to FORM GSTR-2A of the said registered persons. Such discrepancies are considered by the tax officers as representing ineligible ITC availed by the registered persons, and are being flagged seeking explanation from the registered persons for such discrepancies and/or for reversal of such ineligible ITC.

2. It is mentioned that FORM GSTR-2A could not be made available to the taxpayers on the common portal during the initial stages of implementation of GST. Further, restrictions regarding availment of ITC by the registered persons up to certain specified limit beyond the ITC available as per FORM GSTR-2A were provided under rule 36(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as "CGST Rules") only with effect from 9th October 2019. However, the availability of ITC was subjected to restrictions and conditions specified in Section 16 of CGST Act from 1st July, 2017 itself. In view of this, various representations have been received from the trade as well as the tax authorities, seeking clarification regarding the manner of dealing with such discrepancies between the amount of ITC availed by the registered persons in their FORM GSTR-3B and the amount as available in their FORM GSTR-2A during FY 2017-18 and FY 2018-19.

3. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act, hereby clarifies as follows: S. no. Scenario Clarification - 16 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR a. Where the supplier has failed to file FORM GSTR-1 for a tax period but has filed the return in FORM GSTR- 3B for said tax period, due to which the supplies made in the said tax period do not get reflected in FORM GSTR-2A of the recipients. b. Where the supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B for a tax period, but has failed to report a particular supply in FORM GSTR-1, due to which the said supply does not get reflected in FORM GSTR-2A of the recipient. c. Where supplies were made to a registered person and invoice is issued as per Rule 46 of CGST Rules containing GSTIN of recipient, but supplier has wrongly reported the said supply as B2C supply, instead of B2B supply, in his FORM GSTR-1, due to which the said supply does not get reflected in FORM GSTR-2A of the said registered person. d. Where the supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B for a tax period, but he has declared the supply with wrong GSTIN of the recipient in FORM GSTR-1. ITC claimed by In such cases, the difference registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in para 4 below. ITC claimed by In such cases, the difference registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided para 4 below. In such cases, the difference registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided para 4 below. claimed by ITC ITC claimed by In such cases, the difference registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided para 4 below. In addition, the proper officer of the actual recipient shall intimate concerned jurisdictional tax authority of the registered person, whose GSTIN has been mentioned wrongly, that ITC on those transactions is required to be disallowed, if claimed by such their FORM recipients However, GSTR-3B. - 17 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR allowance of ITC to the actual recipient shall not depend on the completion of the action by tax authority of such registered person, whose GSTIN has been mentioned wrongly, and such action will be pursued as an independent action.

4. The proper officer shall first seek the details from the registered person regarding all the invoices on which ITC has been availed by the registered person in his FORM GSTR-3B but which are not reflecting in his FORM GSTR-24. He shall then ascertain fulfilment of the following conditions of Section 16 of CGST Act in respect of the input tax credit availed on such invoices by the said registered person: i) that he is in possession of a tax invoice or debit note issued by the supplier or such other tax paying documents, ⅱ) that he has received the goods or services or both: iii) that he has made payment for the amount towards the value of supply, along with tax payable thereon, to the supplier. Besides, the proper officer shall also check whether any reversal of input tax credit is required to be made in accordance with section 17 or section 18 of CGST Act and also whether the said input tax credit has been availed within the time period specified under sub-section (4) of section 16 of CGST Act.

4.1 In order to verify the condition of clause (c) of sub-section (2) of Section 16 of CGST Act that tax on the said supply has been - 18 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR paid by the supplier, the following action may be taken by the proper officer:

4.1.1 In case, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the said invoices of supplier have actually been made by the supplier to the said registered person and the tax on such supplies has been paid by the said supplier in his return in FORM GSTR 3B. Certificate issued by CA or CMA shall contain UDIN. UDIN of the certificate issued by CAs can be verified from ICAI website https://udin.icai.org/search-udin and that issued by CMAs can be verified ICMAI website https://eicmai.in/udin/VerifyUDIN.aspx.

4.1.2 In cases, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR-2A of the registered person in respect of a supplier for the said financial year is up to Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR-3B.

4.2 However, it may be noted that for the period FY 2017-18, as per proviso to Section 16(4) of CGST Act, the aforesaid relaxations shall not be applicable to the claim of ITC made in the FORM GSTR-3B return filed after the due date of furnishing return for the month of September, 2018 till the due date of furnishing return for March, 2019, if supplier had not furnished details of the - 19 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR said supply in his FORM GSTR-1 till the due date of furnishing FORM GSTR-1 for the month of March, 2019.

5. It may also be noted that the clarifications given hereunder are case specific and are applicable to the bona fide errors committed in reporting during FY 2017-18 and 2018-19. Further, these guidelines are clarificatory in nature and may be applied as per the actual facts and circumstances of each case and shall not be used in the interpretation of the provisions of law.

6. These instructions will apply only to the ongoing proceedings in scrutiny/audit/investigation, etc. for FY 2017-18 and 2018-19 and not to the completed proceedings. However, these instructions will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending. On perusal of the circular, it becomes apparently clear that the circular has been issued in the light of difficulties in availment of ITC on invoices not reflected in GSTR-2A during the FY 2017- 18 and 2018-19. In order to address the issues of non-filing of GSTR-1 by suppliers for technical limitations in the system etc/quoting of wrong GSTIN/non-reporting of certain invokes in GSTR-1/wrong declaration of supply B2C instead of B2B supply and vice versa etc. The CBIC has considered the difficulties on ITC availment during the said FYs and has now prescribed the procedure under Para 4 of the circular which calls for an elaborate verification to be done by the proper officer. It is further mentioned under Para 6 of the circular that the instruction contained in the new circular will apply in those case for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending. I find in the instant appeals, the LAAS in the impugned ITC availed on those invoices which are not uploaded in GSTR 2A during the FY 2018-19 and also invoices which are uploaded the GSTIN - 20 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR cited was wrong. The above two grounds are covered under Para 3A and 3D of the Circular No. 183/15/2022 dated 27.12.2022. In terms of the clarification in Column No. 3 of the table appended to Para 3 for scenario A and D as applicable in the instant appeals it is clarified that in such cases- Scenario S. no. a. Where the supplier has failed to file FORM GSTR-1 for a tax period but has filed the return in FORM GSTR-3B for said tax period, due supplies made in the said tax period do not get reflected in FORM GSTR-2A recipients. to which d. Where the supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B for a tax period, but he has declared the supply with wrong GSTIN of the recipient in FORM GSTR-1. Clarification In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled procedure provided in para 4 below. following actual person, recipient following In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled procedure provided in para 4 below. In addition, the proper officer of intimate concerned jurisdictional tax authority of the registered GSTIN has been mentioned wrongly, transactions is required to be disallowed, if claimed by such recipients in their FORM GSTR- 3B. However, allowance of ITC to the actual recipient shall not depend on the completion of the action by the tax authority of such registered person, whose GSTIN has been mentioned wrongly, and such action will be pursued as an independent action. ITC on - 21 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR In terms of the clarification issued, in the scenarios enumerated in the A and D above, the appellant has to follow the procedure provided under Para 4 of the circular to establish the non-uploading and wrong GSTIN mentioned invoices on which ITC has been availed under GSTR-3B and claimed as refund and zero-rated supplies are indeed correctly availed under Section 16 of the CGST Act, 2017.

17. In the impugned order the LAA has recorded a finding that the invoices were not declared in GSTR-1 filed by the supplier of appellant and therefore, GSTR-2A is not auto populated and accordingly, refund to the extent not reflected in the GSTR-2A cannot be sanctioned in terms of circular No 135/05/2010 dated 31-03-2020. In the grounds of appeal the appellant has strongly contested the rejection on the ground that the ITC was availed legitly under Section 16 of the CGST Act, 2017 and circulars did not specify such requirement during the claim period. I have examined the both the contentions. I observe that the scenario explained above reason/ ground for rejection of refund for non- declaration of invoices in GSTR-1 by the supplier on which ITC was availed by the appellant in their GSTR-3B during the claim period and consequently in GSTR-2A, the same is covered under S.No. 2 of table annexed under para 3 of the circular dated 27. 12- 2022 i.e., outward supply invoices missing in GSTR-1 filed by the supplier and a detailed procedure has been prescribed at para 4 of the circular. Once it is established as per procedure prescribed that it is only a bona fide error not to have reflected in GSTR-1 by the supplier, the ITC availment becomes legit and consequently, it is but natural to claim refund of the ITC accumulated. In this regard, I rely on the decision of the Hon. CESTAT Regional Bench, Chandigarh in the case of Comms of Central Excise Delhi - 22 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR and Delhi III Vs. Convergys India Services Private Ltd. Final Order Nos. A/61117-61127/2016-CU(DB) dated 10.08.2016 as reported in 2017 (48) S.T.R. 173 (Tri.-Chan) wherein the Hon. Tribunal has observed- Refund - CENVAT credit - Input service - Eligibility of certain input services for credit purposes denied by original authority during course of processing refund claim under Rule 5 of CENVAT Credit Rules, 2004 - HELD: Correct course of action to be deciding eligibility of various input services for credit and thereafter deciding correctness of claim in terms of provisions of impugned Rule 5 read with Notification No. 5/2006-C.Ε. (Ν.Τ.), dated 14-3-2006 in refund proceedings Board circular clarifying that there cannot be two yard- sticks, one for availing credit and another for granting refund Considering detailed findings recorded by Commissioner (Appeals) regarding eligibility of refunds in respect of various input services and in absence of any contrary evidence submitted by Revenue, impugned orders not to be interfered with Also, no reason to differ with Commissioner (A)'s findings of interest payable on delayed sanction of refund - Rules 2(l) and 5 of CENVAT Credit Rules, 2004. - One way to interpret the eligibility of credit is to check whether the absence of such input services would adversely impact the quality and efficiency of the exported service. If the answer is in affirmative the input service should be held as eligible for credit. [paras 3, 4, 5]

18. The above decision has been followed by the jurisdiction CESTAT, Bangalore in the case of M/s. Microsoft India R&D (Private Ltd.) Vs. Commissioner of Central Excise and Service Tax, Bangalore Final Order No. 20648/2021 dated 26.07.2021 as reported in 2022 (56) GSTL 29 (Tri. Bang). I also observe that circulars issued by the department are binding on the authorities and in this regard I rely on the decision of Hon. Supreme Court of India in the case of Commissioner of Customs Calcutta Vs. Indian Oil Corporation Ltd in Civil Appeal Nos. 2342-2362/2001 dated

17.02.2004 as reported in 2004 (165) ELT 257(SC) and Hon. - 23 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR Supreme Court of India in the case of Collector of Central Excise Vadodara Vs. Dhiren Chemical Industries in Civil Appeal No. 7937/1995 dated 12.12.2001 as reported in 2002 (139) ELT 3(SC).

19. Adverting to the above factual, legal and binding instructions in the circular, I find that the appeal is liable to be allowed subject to verification of the procedure stipulated under Para 4 of Circular No. 183/15/2022 dated 27.12.2022. Accordingly, I do SO.

20. Accordingly, I pass the following order; - ORDER I allow the Appeal No. 65/2020 filed by M/s. Broadcom Communication Technologies Pvt. Ltd. (merged with M/s. LSI India Research and Development Private Ltd) against Order-in- original no. 72/2019-20 dated 24.02.2020 as per the discussions and directions at paras 16&17 above with consequential relief in any accordance with law. The appeal no. 65/2020 filed by M/s. Broadcom Communication Technologies Pvt. Ltd. (Merged with M/s. LSI India Research and Development Private Ltd), is disposed of accordingly.”

4. As can be seen from the aforesaid order passed by the Appellate Authority, the claim for refund has been upheld in favour of the petitioner and the BCTPL has been directed to grant refund after verifying the procedure in terms of para No.4 of the aforesaid procedure dated 27.12.2022. On 17.02.2025, the petitioner submitted a representation along with an application dated - 24 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR

04.03.2025 seeking refund of ITC in terms of the order of the Appellate Authority. It is the grievance of the petitioner that despite the Appellate Authority concluding in favour of the petitioner by upholding grant of refund, the respondent once again issued show- cause notice, to which the petitioner replied and proceeded to pass the impugned order, which is illegal, arbitrary and contrary to the order of the Appellate Authority and as such, the petitioner is before this Court by way of the present petition.

5. Per contra, learned counsel for the respondent would support the impugned order and submits that there is no merit in the petition and that the same is liable to be dismissed.

6. As rightly contended by the learned counsel for the petitioner, a perusal of the aforesaid order of the Appellate Authority will indicate that the claim for refund of the petitioner has been completely upheld and sanctioned by the Appellate Authority, which has directed grant of refund after verification in terms of para 4 of the Circular dated 27.12.2022, in fact, in the operative portion of the order, the Appellate Authority has completely allowed the appeal as per the directions at para 17 and 18, which are in favour of the petitioner for the purpose of granting refund in favour of the - 25 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR petitioner. Under these circumstances, I am of the considered opinion that the respondent-Assistant Commissioner completely misdirected himself going beyond the order of the Appellate Authority and reopening the entire matter, which is impermissible in law and contrary to the directions issued by the Appellate Authority, which has unequivocally granted refund to the petitioner by issuing directions for the limited extent of verifying the procedure in terms of para 4 of the Circular dated 27.12.2022 and it was not open for the Assistant Commissioner to embark upon an enquiry all over again and consequently, the impugned order deserves to be quashed and the application for refund filed by the petitioner deserves to be allowed by issuing necessary directions.

7. In the result, I pass the following ORDER (i) The petition is allowed. (ii) The impugned order at Annexure-A dated 30.04.2025 passed by the respondent at Annexure-A is hereby quashed. - 26 - NC: 2025:KHC:46886 WP No. 23921 of 2025 HC-KAR (iii) It is held that the petitioner is entitled to refund of unutilized ITC in terms of the order at Annexure-N dated 06.03.2023 passed by the Appellate Authority. (iv) The respondent is directed to grant/pay refund in favour of the petitioner in terms of the order of the Appellate Authority together with applicable interest within a period of six weeks from the date of receipt of a copy of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE BMC List No.: 2 Sl No.: 0