TMI Blog2022 (1) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... VERSUS UNION OF INDIA [ 2020 (12) TMI 1116 - GUJARAT HIGH COURT] , whereby reliance was made upon the Circular 37/2018-Customs dated 09.10.2018, whereby the competent Authority had withheld the refund of IGST on the ground that exporters had availed the option to take drawback at higher rate in place of the IGST refund out of their own volition. - Refund allowed. Rate of interest - HELD THAT:- There is a direct binding decision of this Court, which is rendered in favour of the assessee holding the assessee entitled to the refund of IGST. Despite the aforesaid decision of this Court in the case of Amit Cotton Industries [ 2020 (12) TMI 1116 - GUJARAT HIGH COURT] , for the reasons best known to the adjudicating authority, the adjudicating authority has failed to abide by the aforesaid decision and has chosen not to take decision with regard to the refund of IGST. To repeat, on going through entire record, the stand of the respondent Authority to withhold IGST based on non-consideration of Judicial pronouncement is equally irrational and arbitrary. The respondent Authorities are directed to immediately sanction the refund towards IGST paid in respect of goods exported Zero ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners Company had claimed drawback at higher rate by punching option 5202A and option 600699A instead of claiming drawback at lower rate by punching option 5202B and option 600699B , while generating shipping bills. It is claimed by the petitioners that having realized the aforesaid mistake, vide letter dated 12.09.2017, had immediately requested the Deputy Commissioner of Customs (Export), Customs House, Mundra, to amend the aforesaid shipping bills in exercise of powers conferred under Section 149 of the Customs Act, 1962. The request was also made to the effect of punching of A to be treated as punching of B . On 15.09.2017, the petitioner Company had submitted to the Deputy Commissioner of Customs (Exports), Customs House, Mundra to consider their case for IGST refund and had further disclosed their intention to not to claim higher drawback thereby showing their willingness to give back differential drawback amount. In furtherance thereof, the petitioner Company had drawn Demand Drafts bearing Nos.332754 and 332755, dated 17.10.2017 and Demand Draft No.044281, dated 13.09.2017 for an aggregate amount of ₹ 3,39,245/- towards differential drawback amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 172239.85 10 7847374 05/08/2017 14689.00 2203.00 12486.00 75167.00 11 7894392 08/08/2017 15074.00 2261.00 12813.00 77117.80 12 7943766 10/08/2017 30842.00 4626.00 26216.00 157952.10 TOTAL 422900.00 89807.00 333093.00 1494739.30 5. It is further contended by the learned advocate for the petitioner that the goods supplied by the registered person were neither NIL rated goods or exempt supplies. The said supplies are affected by the payment of IGST in accordance with the provisions contained in Section 16(3)(b) of the IGST Act. According to the said provision, a registered person making Zero Rated Supply has an option to claim refund in accordance with Section 16(3)(b) of the Act or as he may supply goods or service or both on payment of integrated tax and can claim refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07/2017 7464252 19/07/2017 131306 06/08/2017 EGLV100770013194 22/07/2017 05 AIM/EXP055/17-18 19/07/2017 AIM/EXP/055/17-18 19/07/2017 7486382 20/07/2017 132206 05/08/2017 EGLV100770013411 30/07/2017 06 AIM/EXP057/17-18 20/07/2017 AIM/EXP/057/17-18 20/07/2017 7517165 21/07/2017 131305 05/08/2017 EGLV100770013551 27/07/2017 07 AIM/EXP058/17-18 20/07/2017 AIM/EXP/058/17-18 20/07/2017 7516021 21/07/2017 131305 05/08/2017 EGLV100770013305 27/07/2017 08 AIM/EXP059/17-18 22/07/2017 AIM/EXP/059/17-18 22/07/2017 7556291 24/07/2017 131307 05/08/2017 SUDUI7866A1L1439 28/07/2017 09 AIM/EXP060/17-18 02/08/2017 AIM/EXP/060/17-18 02/08/2017 7802881 03/08/2017 132220 29/09/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorities by filing affidavit in reply, which is filed through the Assistant Commissioner of Customs, on behalf of the respondent Nos.1 to 3 herein. The respondent Authorities have referred to and rely upon the various shipping bills submitted by the petitioner Company in the month of July-August, 2017 and has thereby submitted that the petitioners themselves at the relevant stage has chosen option A and has also received higher drawback amounting to ₹ 4,22,900/-. It is, therefore, submitted by the respondent Authorities that the goods of the petitioners cannot be considered for refund of IGST, more particularly, when the petitioner Company are under legal obligation to complete the mandatory records for their export consignment to avail such benefits. The respondent Authorities have solely relied upon the instructions issued under Board Circular No.37/2018-Customs dated 09.10.2018 read with Notification No.131/2016-Cus (NT) dated 26.07.2017. By adverting to the aforesaid instructions, the respondents have contended that it would not be justified to allow the petitioners to avail IGST refund who on their own volition initially claimed benefits of higher drawback. 8. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder. 54. Refund of tax. -- (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. (2) A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed shall be credited to the Fund referred to in section 57. (6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under subsection (5) for final settlement of the refund claim after due verification of documents furnished by the applicant. (7) The proper officer shall issue the order under subsection (5) within sixty days from the date of receipt of application complete in all respects. (8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to-- (a) refund of tax paid on zero-rated supplies of goods or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be notified on the recommendations of the Council, if as a result of the appeal or further proceedings he becomes entitled to refund. (13) Notwithstanding anything to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident taxable person under subsection (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39. (14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Explanation.-For the purposes of this section, (1) refund includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only when:- (a) the person in charge of the conveyance carrying the export goods duly files a departure manifest or an export manifest or an export report covering the number and the date of shipping bills or bills of export; and (b) the applicant has furnished a valid return in FORM GSTR- 3 or FORM GSTR-3B, as the case may be; (2) The details of the relevant export invoices in respect of export of goods contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India. Provided that where the date for furnishing the details of outward supplies in FORM GSTR-1 for a tax period has been extended in exercise of the powers conferred under section 37 of the Act, the supplier shall furnish the information relating to exports as specified in Table 6A of FORM GSTR-1 after the return in FORM GSTR-3B has been furnished and the same shall be transmitted electronically by the common portal to the system designated by the Customs: Provided further that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the services exported out of India shall be filed in FORM GST RFD-01 and shall be dealt with in accordance with the provisions of rule 89. (10) The persons claiming refund of integrated tax paid on exports of goods or services should not have received supplies on which the benefit of the Government of India, Ministry of Finance notification No. 48/2017-Central Tax, dated the 18th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305 (E), dated the 18th October, 2017 or notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E), dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321 (E), dated the 23rd October, 2017 or notification No. 78/2017- Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R 1272(E), dated the 13th October, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in withholding the refund of IGST paid by the exporter of the goods i.e. Zero Rated Supply is concerned, is no more res integra . This Court had an occasion to deal with such issue in the similar set of facts of the case. 13. In the case of Amit Cotton Industries Vs. Principal Commissioner of Customs reported in [2019] 107 taxmann.com167(Gujarat) is concerned, the relevant observations are reproduced herein below: 23. Section 16 of the IGST Act, 2017, referred to above provides for zero rating of certain supplies, namely exports, and supplies made to the Special Economic Zone Unit or Special Economic Zone Developer and the manner of zero rating. 24. It is not in dispute that the goods in question are one of zero rated supplies. A registered person making zero rated supplies is eligible to claim refund under the options as provided in sub-clauses (a) and (b) to clause (3) of Section 16 referred to above. 26. Rule 96 of the CGST Rules provides for a deeming fiction. The shipping bill that the exporter of goods may file is deemed to be an application for refund of the integrated tax paid on the goods exported out of India. Section 54 referred to above shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructions or guidance to the concerned department, the circular is dated 9th October 2018, whereas the export took place on 27th July 2017. Over and above the same, the circular explains the provisions of the drawback and it has nothing to do with the IGST refund. Thus, the circular will not save the situation for the respondents. We are of the view that Rule 96 of the Rules, 2017, is very clear. 14. So far as the issue with regard to the applicability of Circular dated 09.10.2018 read with Notification 31/2016 Cus (N.T.) dated 31.10.2016 as amended by Notification 59/12 dated 29.06.2017 and Notification 73/2017-Customs (NT) dated 26.07.2017 are concerned, it would be apt to reproduce the observations made by the Hon ble Apex Court in the case of Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries , reported in 2008(12) S.T.R. 416 (S.C.) . In the aforesaid decision, the Constitutional Bench of the Apex Court was considering the binding nature of a circular issued under the Central Excise act, 1944 which were contrary to decisions rendered by the Supreme Court. The Apex Court in the above case held that :- Circulars and instructions issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the detriment of the assessee. Needless to emphasise that a circular should not be adverse and cause prejudice to the assessee. Thus, such Circulars are merely in the form of instructions or guidance to the concerned Department and it explains the provisions of drawback, however, it has nothing to do with the IGST refund. More particularly, Rule 96 of GCST Rules, 2017 is explicitly clear on the said aspect. 15. Even recently this Court had an occasion to deal with the similar facts in the case of Awadkrupa Plastomech Pvt. Ltd. Vs. Union of India in Special Civil Application No.1014 of 2020 dated 15.12.2020, whereby reliance was made upon the Circular 37/2018-Customs dated 09.10.2018, whereby the competent Authority had withheld the refund of IGST on the ground that exporters had availed the option to take drawback at higher rate in place of the IGST refund out of their own volition. This Court held as under: 9. Even as per the Condition No.7 of the Notification131/2016 Cus. (N.T.) dated 31/10/2016, if the rate indicated in the columns (4) i.e. higher duty drawback and (6) i.e. lower duty drawback are the same, then it shall necessarily imply that the same pertains o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicate that the petitioners therein have prayed for refund prior to insertion of Section 11BB in the Central Excise Act, 1944, which had been inserted w.e.f. 26.05.1995 thereby providing for interest on delayed refund. In the present matter, the issue relates to inaction of the respondent Authorities in not taking decision with regard to the refund of IGST with regard to the goods exported i.e. at Zero Rated Supplies . Akin provisions in form of Section 56 of the CGST Act, 2017, is incorporated, which deals with the interest on delayed refund. Before adverting to the issue of interest, it would be appropriate to reproduce Section 56 of the CGST Act, which reads as under: Interest on delayed refunds : Section 56: If any tax ordered to be refunded under subsection (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under subsection (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing decision of this Court, which is rendered in favour of the assessee holding the assessee entitled to the refund of IGST. Despite the aforesaid decision of this Court in the case of Amit Cotton Industries (Supra), for the reasons best known to the adjudicating authority, the adjudicating authority has failed to abide by the aforesaid decision and has chosen not to take decision with regard to the refund of IGST. At this stage, it would be worth to refer to the ratio laid down by this Court in the case of E.I. Dupont India (P) Ltd. Vs. Union of India reported in 2014(305) ELT 282 (Guj), whereby this Court after relying upon the decision of the Hon ble Supreme Court in the case of Union of India Vs. Kamlakshi Finance Corporation Ltd. reported in 1991(55) ELT 433 has strongly disapproved such arbitrary act of the adjudicating authority in ignoring binding decisions / orders passed by the higher Appellate Authorities / Courts. This Court in clear and unequivocal message rendered by pronouncement of the decision of the Hon ble Supreme Court as well as this Court has cautioned the State Authorities to abide by the decision of the higher Appellate Authorities / Courts. To repea ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
