IGST refund cannot be denied merely on a customs circular that cannot override the statute, the Tribunal held.

IGST refund could not be denied solely on the basis of Circular No. 37/2018-Customs where excess duty drawback had been taken and later reversed with interest. The Tribunal noted that the circular had already been judicially interpreted as merely instructional and incapable of overriding the statute or determining refund entitlement. On that basis, the rejection of refund was found inconsistent with the settled legal position, the lower orders were set aside, and the matter was remanded for fresh decision in accordance with law.

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Issues: Whether denial of IGST refund on the ground of excess duty drawback, based solely on Circular No. 37/2018-Customs dated 09.10.2018, was sustainable, and whether the matter required reconsideration in light of judicial interpretation.

Analysis: The refund claim arose from export proceedings in which duty drawback had been taken at a higher rate and later reversed with interest. The lower authorities rejected the IGST refund only by relying on the circular. The Tribunal noted that the jurisdictional High Court and another High Court had already interpreted the same circular and held that it was merely instructional in nature, could not govern IGST refund entitlement, and could not prevail over the statute. In that view, the rejection of refund was found inconsistent with the judicially declared legal position.

Conclusion: The denial of refund was held unsustainable, the orders of the lower authorities were set aside, and the matter was remanded for fresh decision in accordance with law.

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