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TMI Blog2022 (6) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Appellate authority being Joint Commissioner of Income, CGST & CX, Appeal-I, Kolkata, in Appeal No. 12/CGST/Kol-North/2021 filed by the assessee company against the order dated 10th July, 2019, passed by Assistant Commissioner of CGST & CX, Khardah Division, Kolkata-North. Since the issues involved in both the Writ Petitions are related and relief asked for in both the Writ Petitions are inter-dependent on the final outcome of both the Writ Petitions, the same are heard and disposed of by this common judgment. Assessee company has filed the instant Writ Petition being WPA No. 12676 of 2021, being aggrieved by inaction and refusal on the part of CGST authority concerned in disbursing the refund amount of Rs.1,71,20,724/- with applicable interest as per the aforesaid order dated 17th February, 2021, passed by the Appellate authority in spite of repeated request by it and it has made prayer for relief in the aforesaid Writ Petition by way of direction upon the CGST authorities concerned to refund the aforesaid amount of refund along with applicable interest to the assessee company as per the aforesaid order of the Appellate authority dated 17th February, 2021. CGST autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply" has not been defined under the Cess Act, definition of exempt supply contained in Section 2 (47) of the CGST Act shall apply mutatis mutandis for computation of refund of ITC of Cess by application of provisions of Section 11, Section 9 and Section 2 (2) of the Cess Act. Assessee company alleges that the CGST authorities concerned have ignored the expression 'mutatis mutandis" appearing in Section 2 (2) of Cess Act and have not given any justification as to why domestic supply of finished goods which are subject to nil rate of Compensation Cess cannot be construed as exempted supplies. When it is an admitted fact that refund of unutilized credit of compensation cess would be available by applying the formula prescribed under Rule 89 of the CGST Rules, the definition of exempted supplies under Section 2 (47) of the CGST Act has to be read harmoniously with the provisions of Compensation Act and goods subject to nil rate of compensation cess are to be construed as exempt supplies. Assessee company submits that the Revenue Authorities cannot be allowed to approbate and reprobate at the same time. The Assessee submits that the adjudicating authority had taken Net ITC amount a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and read with Section 16 of the IGST Act, Section 54 of the CGST Act and Rule 89 (4) of the CGST Rules. The formula for refund of ITC in case of zero-rated supply of goods or services without payment of tax under LUT, as contained in Rule 89 (4) of the CGST Rules categorically provides for exclusion of value of exempt supplies other than zero rated supplies while calculating adjusted total turnover. In computing the refund amount, the Assessee excluded supply of finished goods not subject to Cess and Non-GST turnover during the relevant period, while arriving at the adjusted total turnover. Net ITC amount was taken after reversal of Rs. ITC of Cess amounting to Rs.7,01,82,060/-. In spite of the aforesaid factual and legal position, only refund of Rs. 2,03,33,442/- was sanctioned by the CGST authority while refund claim of Rs.1,17,20,724/- was rejected by the refund sanction order dated 10th July, 2019. The adjudicating authority computed the refund by adding the supply of finished goods not subject to Cess in the adjusted total turnover although the formula prescribed under Rule 89 (4) of the CGST Rules categorically provides for exclusion of value of exempt supplies, in spite o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of revenue of the States on account of subsumption of various taxes commencement of the GST regime. Hence, cess is a levy which partakes the character of all the levies, which now are subsumed in GST. Cess is akin to the components of GST, which is a constitutionally approved amalgam of State taxes, which existed prior to the commencement of the GST regime. The goods and services Tax Compensation Cess Rules, 2017 were also framed and made effective from 1st July, 2017 wherein the Central Goods and Services Tax Rules, 2017 were adapted. Having regard to the conscious use of the expression "mutatis mutandis" in Section 11 of the Cess Act all the provisions of CGST and IGST Acts would be squarely applicable to the levy, collection and refund of the Cess Act. The words tax and cess for the purpose of the Act would have to be used interchangeably. Domestic supply of finished goods which are not liable to Compensation Cess are to be reckoned as exempted supplies for the purpose of calculation of refund in terms of Rule 89 (4) of the CGST Rules. Section 2 (47) of the CGST Act defines "exempt supply" as supply of any goods or services or both which attracts nil rate of tax or which m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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