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TMI Blog2019 (12) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular No. 37/2018- CUSTOMS dated 09.10.2018 is (i) ultra vires Section 16 of the IGST Act, 2017 read with Section 54 of CGST Act, 2017 and Rule 96 of CGST Rules, 2017, and (ii) unconstitutional and violative of Article 14, 19 and 21 of the Constitution of India & Quash the same; c) As a consequence of the above, Direct Respondent Authorities to grant refund of IGST paid on goods exported by the Petitioners during the Transitional Period." 2. Petitioner Nos. 1, 2, 5 & 9 are private limited companies registered in accordance with the Companies Act, 1956. Petitioner Nos. 3, 4, 6, 8, 10, 12 & 14 are partnership firms. Petitioner Nos. 7, 11 & 13 are sole proprietorships. 3. The collective grievance of the Petitioners for filing the present petition is the denial of IGST refund in accordance with Section 16(3) of the IGST Act, 2017, paid by them on goods exported during the transitional period after introduction of GST Regime i.e. from 01.07.2017 to 30.09.2017. The factual narrative in the petition is that, export of goods from India is "zero rated" i.e. the Petitioners are exempted from payment of tax on the goods exported from India. The government provides various types of expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIRs of duty drawback notified under notification no. 131/2016 referred above. 5. Petitioners exported goods falling under various tariff items mentioned in the drawback schedule, on due payment of IGST. It is claimed that since the drawback schedule prescribed identical tariff rates under Column A as well as Column B , in respect of goods exported and further since there were no guidelines from the GST or Customs department in respect of procedure to be followed in such cases, petitioners inadvertently claimed drawback under Column A, which was mostly between 1.5-4%. 6. As per Rule 96 of CGST Rules, 2017 the shipping bill filled by an exporter is deemed to be an application for refund of IGST, paid on the goods exported out of India. In view of the aforesaid provision, Petitioners awaited refund of IGST in their bank accounts. When the same was not credited, correspondence was initiated with Customs Department. Initially, the claim of IGST refund was not denied and it was in fact assured to them that the refund would be received by them in due course of time. However, despite repeated communication in the form of letters and mails written by the Petitioners to the Custom Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umn B are identical, then the drawback allowable refers only to the Customs component and did not include Central Excise and Service Tax component, irrespective of whether the drawback was claimed under Column A or Column B. The said para reads as under: "The figures shown in the said Schedule in column (4) and (5) refer to the total drawback (Customs, Central Excise and Service Tax component put together) allowable and those appearing in column (6) and (7) refer to the drawback allowable under the Customs component. The difference in rates between the columns (4) and (6) refers to the Central Excise and Service tax component of drawback. If the rate indicated is the same in the column (4) and (6), it shall mean that the same pertains to only Customs component and is available irrespective of whether the exporter has availed of Cenvat facility or not" He argues that Petitioners opted for the drawback claim under column A inadvertently, as a mere technical glitch, due to confusion prevailing during the transitional phase. He submits that Respondents have failed to address their grievances, not withholding numerous representations made to them and now they are constrained to appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely pertains to custom component. The High Court held that the Circular dated 09.10.2018 would not be applicable to the petitioner's case as the drawback at a higher rate was not availed by the petitioner and the earlier Circular dated 23.03.2018 which provided for an alternative mechanism to process IGST refund in case of an inadvertent error would be applicable in the present case. 12. The Petitioners also relied upon G Nxt Power Corp and Ors. v. Union of India and Ors. of the Kerala High Court where the petitioner had been granted drawback of Central Excise component and was denied IGST paid as cash. The court directed the respondents to adjust the amount availed by the petitioner on account of higher rate of duty drawback and pay the balance of IGST payable to petitioner i.e., IGST minus higher rate of duty drawback already availed by the petitioner and avoid the additional burden of interest payment on IGST refund. 13. We have given due consideration to the contentions raised by the learned counsels for the parties. 14. Though, the challenge in the present petition is also to the vires of the circulars enumerated above, however, Petitioners are primarily concerned with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is one such example where Petitioners have been victim of technical glitches on account of confusion during transitional phase. We are thus of the view that taxpayers like the Petitioners should not be denied the substantive benefit of the IGST paid by them on exports. 15. We find merit in the submission of Mr. Bansal that the exporters would not voluntarily opt for the claim of drawback under Column A at the cost of foregoing IGST paid on exports, where the duty drawback rates under Column A and B were same, the exporters would have received the same amount of drawback even if they would have mentioned "B" in their shipping bills instead of "A" for claiming drawback. Since the condition for not claiming IGST refund is not applicable to cases where duty drawback has been claimed under Column B, exporters would have received IGST refund also on mentioning "B". Therefore, exporters did not have any benefit in claiming drawback under Column A. It is not pointed out by the Respondents that the Petitioners derived any undue advantage by their aforesaid mistake. On the contrary, it would result in causing loss for the value of the IGST paid on exports. By way of illustration, we take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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