TaxTMI 
TaxTMI 
2023 (4) TMI 1182
X X X X Extracts X X X X
X X X X Extracts X X X X
.... would get triggered. The petitioner claims that interest should be triggered from the date when the initial application for refund was filed. On the other hand, the respondent/revenue asserts that in terms of the proviso appended to Section 56 of the CGST Act, interest will get triggered 60 days after the date when this court passed an order directing consideration of the application. 3. Therefore, for determination of the aforesaid central and, as noted above, the only issue, the following broad facts are required to be considered. 3.1 The petitioner is in the business of exporting jewellery. The petitioner had, concededly, purchased jewellery, which was exported thereafter. 3.2 The petitioner had claimed, for the period in issue, Input Tax Credit [ITC]. The period involved, i.e., the period for which ITC was claimed, was August 2017 and September 2017. 3.3 The facts and figure concerning the period, the quantity in terms of weight of the jewellery domestically purchased, the ITC availed and the jewellery exported, once again in terms of weight, and the consequent total weight are set forth in the table below: Period Purchase in Grams ITC Availed (Rs.) Export in Grams Aug....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2 That such a claim was viable is evident upon a perusal of the second circular, i.e., Circular no. 37/11/2018 dated 15.03.2018. Para 11 of the said circular, being relevant, is extracted hereafter: "11. Filing frequency of Refunds: Various representations have been made to the Board regarding the period for which refund applications can be filed. Section 2(107) of the CGST Act defines the term "tax period" as the period for which the return is required to be furnished. The terms 'Net ITC' and 'turnover of zero rated supply of goods/services' are used in the context of the relevant period in rule 89(4) of CGST Rules. The phrase 'relevant period' has been defined in the said sub-rule as 'the period for which the claim has been filed'. 11.1 In many scenarios, exports may not have been made in that period in which the inputs or input services were received and input tax credit has been availed. Similarly, there may be cases where exports may have been made in a period but no input tax credit has been availed in the said period. The above referred rule, taking into account such scenarios, defines relevant period in the context of the refund claim ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the initial round, the petitioner was granted cumulative refund for August and September, 2017 amounting to Rs. 12.24 crores and the cumulative amount which was denied for the very same months was Rs. 2.30 crores (approximately). This amount was, however, sanctioned ultimately on 24.05.2019, with interest amounting to Rs. 70,861 being sanctioned on 08.07.2019. 12. Mr Puneet Agrawal, who appears on behalf of the petitioner, says that the calculation of interest is not in accordance with the provisions of Section 56 of the CGST Act. 12.1 According to Mr Agrawal, the interest at the notified rate, which is presently 6%, should run from 60 days after the date when the deficiency application, qua initial application of refund filed on 16.12.2017, was cured. 12.2 As per this contention advanced by Mr Agrawal, the interest should run from 18.04.2018 and would end on the date when the amount was remitted for the respective months, both against the CGST and DGST. 13. The record shows that in case of CGST, the refund for the months of August and September 2017 was concededly remitted on 02.07.2019 whereas qua DGST, the amount was remitted to the petitioner for the months of August and S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....GST Act is set forth hereafter: "Section 56 - Interest on delayed refunds If any tax ordered to be refunded under sub-section (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 of receipt of application under the said sub-section till the date of refund of such tax: Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified 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 of receipt of application ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated goods & services Rs. 3998497570/- whereas you have requested for refund on the purchases to the tune of Rs. 4695614991/- in the month of September 2017. 17020253/- 21. As would be evident, the reasons based on which a part of the refund was sought to be denied, was that the value of exports for the given month was less than the purchases made in that month. Accordingly, for the month of August 2017, as noted above, the inadmissible amount was pegged at Rs. 59,67,280/-; likewise for the month of September 2017, the inadmissible amount was quantified at Rs. 1,70,20,253/-. 22. The petitioner gave its explanation, as noted hereinabove while narrating the facts, via two separate responses of even date, i.e., 10.05.2018. 22.1 For the sake of convenience, the stand taken in the said response(s) to the extent relevant are extracted hereafter: "The Company purchased goods amounting for Rs 282468390/- in the month of Aug 2017, which were exported during the month of Aug and Sept. 2017. Due to GSTN server problem, entire refund has been claimed during the month of Aug. 2017 in spite of part of the export had been made in Sept. 2017. On the date of filing of refund claim, entire st....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... over to October 2017, and accordingly, an application for refund was made on 16.12.2017. 23. It is important to note, a fact that we have adverted to above, that this explanation was finally accepted by the respondents/revenue on 24.05.2019. As observed hereinabove, the entire amount of refund, which was withheld via two separate orders dated 11.05.2018, was sanctioned in favour of the petitioner. 24. The argument of the respondent/revenue, that the refund order dated 24.05.2019 came to be passed on account of the order issued by the Coordinate Bench of this Court on 28.03.2019, and therefore, the trigger point for commencement of the period of refund as stipulated in the proviso appended to Section 56 of the CGST Act will apply, does not find favour with us. The reason for this is that the proviso, as indicated above, is an exception to the main part of the Section 56 of the CGST Act. The proviso is triggered only when the facts of a case do not fall in the main part. 24.1 Ordinarily, the proviso thus carves out an exception to the main provision, to which it is appended, even while it embraces the field that is covered by the main provision [See Commissioner of Income Tax, My....