Refex Industries has secured a favourable Order-in-Appeal from the Commissioner (Appeals), CGST & Central Excise, Bhopal, effectively vacating an aggregate demand of ₹29.32 crore comprising tax and penalty. The order, dated October 13, 2026, and received by the company on October 15, 2026, sets aside the entire liability confirmed in the earlier Order-in-Original.

The dispute originated from allegations by the Directorate General of GST Intelligence (DGGI) that the company had availed Input Tax Credit (ITC) amounting to ₹14.66 crore on invoices issued by suppliers alleged to be non-existent. These transactions were related to coal and ash handling works executed between April 2018 and March 2021. The Additional Commissioner had previously confirmed the full demand along with interest and a matching penalty under Section 74 of the CGST Act, 2017.

Details of the appellate order

The Commissioner (Appeals) allowed Refex Industries' appeal, holding that the demand, interest, and penalty were not sustainable based on the facts and evidence on record. Consequently, the aggregate demand of ₹29,31,92,582 stands vacated. This includes the principal tax demand of ₹14.66 crore and the corresponding penalty of the same magnitude.

Financial impact and refund eligibility

The company stated that the order is favourable and is not expected to have any material adverse impact on its financials or operations. A significant positive development is the status of ₹5.87 crore that the company had previously paid or reversed under protest towards this demand. Following the appellate order, this amount becomes eligible for refund or re-credit in accordance with applicable law and procedure.

What the numbers show

The reversal of the ₹5.87 crore payment under protest represents a direct liquidity release for the company, equivalent to approximately 20% of the total disputed tax demand. While the total liability of ₹29.32 crore was contingent, the immediate cash flow benefit lies in the recovery of the prepaid portion. The department retains the right to appeal further before the GST Appellate Tribunal (GSTAT), but the current ruling removes the immediate financial overhang associated with this specific litigation.

Refex Industries promoter Refex Holding Private Limited (RHPL) disclosed the creation of a pledge on 5,00,000 shares and the release of a pledge on 15,62,500 shares in a filing with stock exchanges on October 13, 2026.

The disclosure was made pursuant to Regulation 31(1) and 31(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The filing details encumbrances created for personal use by promoters and PACs, as well as collateral for loans taken by RHPL.

Pledge Creation Details

RHPL created new pledges on three separate occasions dated October 9, 2026, involving a total of 15,45,000 shares. These were pledged in favor of Infosoft Global Private Limited, Krchoksey Financial Services Private Limited, and S Jogani Exports Private Limited.

Pledge Release Details

On October 12, 2026, RHPL released a pledge on 15,62,500 shares held by Shringee Packaging and Ancilliary Private Limited. The reason cited for this release was the closure of a facility.

Promoter Shareholding Structure

As of October 13, 2026, Refex Holding Private Limited holds 7,76,23,085 shares, representing 56.56% of the total share capital. The total encumbered shares stand at 3,67,64,272, which is 26.80% of the total share capital.

What the Numbers Show

The net movement in pledged shares is a reduction of 18,75,000 shares (release of 15,62,500 minus creation of 15,45,000). Despite this net reduction, the total promoter holding remains stable at 56.56%. The encumbered portion constitutes approximately 47.36% of the total promoter shareholding, indicating that nearly half of the promoter's stake remains pledged, primarily for personal use and company collateral.