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2019 (7) TMI 472
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....;Zero Rated Supplies' made vide shipping bills mentioned hereinabove; D. Your Lordships may be pleased to direct the respondent authorities to pay interest @ 9% to the petitioner herein on the amount of refund of IGST mentioned hereinabove from the date of shipping bills uptill the date on which the amount of refund is paid to the petitioner herein, as the same is arbitrarily and illegally withheld by the respondent authorities; E. Your Lordships may be pleased to grant an ex-parte, ad interim order in favour of the petitioner herein in terms of prayer clause 'C' and 'D' hereinabove; F. Since the petitioner are constrained to approach Your Lordships by way of this petition only because of illegal act of respondent authorities, Your Lordships may be pleased to direct the respondent authorities to pay a cost of this litigation to the petitioner herein; G. Your Lordships may be pleased to grant such other and further relief/(s) that may be deemed fit and proper in the interest of justice in favour of the petitioner." 3. The case of the writ-applicant in its own words as pleaded in the writ-application is as under : "5....
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....773 26/07/2017 3. AC/EXP/ 17-18/11 27/07/2017 AC/EXP/ 17-18/11 27/07/2017 7662194 28/07/2017 132230 08/08/2017 EID0192292 03/08/2017 On perusing the same, it may be observed that goods are exported top Bangladesh under the aforesaid documents. It may also be found that following IGST is paid in regard to the aforesaid goods : Sr. No. Shipping Bill No & Date Amount of IGST Paid (Rs) 1 7437636 - 19/07/2017 6,98,628/- 2 7512885 - 21/07/2017 6,88,986/-, 3 7662194 - 28/07/2017 5,17,506/- TOTAL 19,05,120/- 5.7. As provided in Section 54 of CGST Act, 2017, read with Section 16 of IGST Act, 2017, immediately after the goods are exported, considering the shipping bills as application for refund of IGST paid in regard to the export goods, the respondent authorities are supposed to immediately refund the said amount of IGST to the petitioner. 5.8. In this case, exports were made in July 2017 but till date, IGST is not refunded. It is pertinent to note that no reason for withholding the amount of refund is assigned by the respondent authorities so far. 5.9. Time and again, the petiti....
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....om the email i.d. [email protected]. The same confirms that only reason for withholding refund is that the petitioner had first claimed more rate of draw-back. However, very conveniently, it failed to deal with the fact that the said higher rate is given away/paid back by the petitioner. A copy of the said email is annexed herewith and marked as Annexure-G. On perusing the said email, it may be found that the same further talks about circular No.37/2018- Customs, dated 9.10.2018. However, the said circular is not relevant in this case because the circular restricts Drawback if refund is availed and not the other way around. In any case, since the higher rate of draw-back is now given away/paid-back, even otherwise the question of with-holding refund would not arise." 4. Thus, it appears from the pleadings as aforesaid that the writ-applicant had exported goods in July 2017. It is the case of the writ-applicant that it is eligible to seek refund of the IGST in accordance with the provisions of the IGST Act, 2017. However, according to the writ-applicant, without any valid reason the refund to the tune of Rs. 19,05,121=00 has been withheld. According to the writ-applicant, ....
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.... AMOUNT (INR) WITH INT. 1 7512885 DTD. 21.07.2017 500787/500783 1445 DTD.04.10.2018 137850/- 2. 7437636 DTD. 18.07.2017 500789/500782 1443 DTD. 04.10.2018 132180/- 3. 7662194 DTD. 28.07.2018 500788/500784 1444 DTD. 04.10.2018 103480/- Thanking you Yours faithfully Sd/- Amit Cotton Industries" 10. Mr.Trivedi invited the attention of this Court to Section 16 of the IGST Act, 2017, which is with respect to the 'zero rated supply'. Our attention was thereafter invited to Section 54 of the CGST Act, 2017, which is with respect to refund of tax. In the last, Mr.Trivedi invited the attention of this Court to Rule 96 of the CGST Rule, 2017, which is in respect of the refund of the integrated tax paid on goods or services exported out of India. Referring to and relying upon the aforesaid provisions of law, more particularly, Rule 96, it is submitted that the claim for refund can be withheld only on two grounds as enumerated in the sub-clauses (a) and (b) of clause (4) of Rule 96 of the Rules. 11. Mr.Trivedi submitted that it is not in dispute that the goods were exported to Bangladesh. He pointed....
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....B. Therefore, all the necessary requirements under Rule 96(1) is complied with. As such, no formal refund application is required to be filed. The respondent authorities is required to sanction refund amount considering the shipping bills as refund application. However, the same is not done so far, therefore Your Lordships may direct the respondent authorities to kindly sanction the refund at the earliest. G. As provided in Rule 96(2) and 96(3), the details of 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 goods covered by the said invoice have been exported out of India. The refund amount shall be automatically credited to the concerned bank account of the petitioner herein. Needless to mention that since in the case of the petitioner, they had filed their GSTR-1 return for the month of July 2017 automatically the system must have acted in accordance with the said provisions and the refund ought to have been credited to the concerned bank account of the petitione....
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....rtment and not the assessee. Even in that view of the matter, reliance placed on the said circular is not sustainable for the purpose of withholding refund. K. In any view of the matter, as far as the petitioner is concerned, since they have already reversed/paid back the difference amount of the higher rate and lower rate in order to restrict the drawback claim to lower rate, even the said circular may not prevent the refund of IGST." 13. In such circumstances referred to above, Mr.Trivedi prays that there being merit in this writ-application, the same be allowed and a writ of mandamus be issued directing the authorities to immediately sanction the refund of the IGST paid in regard to the goods exported, i.e. 'zero rated supplies', within the shipping bills referred to above. 14. On the other hand, this writ-application has been vehemently opposed by Mr.Parth Bhatt, the learned standing counsel appearing for the respondents. Mr.Bhatt submitted that the writ-applicant is not entitled to claim the refund of the IGST paid as the writ-applicant had availed higher duty drawback. Mr.Bhatt pointed out that in the case on hand, the writapplicant having availed the h....
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....btained from Customs system have been given in Annex A. The claiming of higher drawback can be ascertained from the facts that the drawback serial number has been affixed with 'A' which denotes higher drawback. I submit that in spite of exporting goods under payment of IGST, the exporter has claimed Higher Drawback and violated condition 11(d) of the Notification 131/2016 - Cus (N.T.) dated 31.10.2016 as amended by notification 59/2017 dated 29.06.2017 to gain unlawful benefits. 12. I say and submit that a new condition, condition no.12A has been introduced after GST in the Notification 131/2016 - Cus (N.T.) dated 31.10.2016 vide Notification 59/2017 dated 29.06.2017 for the purpose of claiming Higher drawback. I submit that as per the condition no.12A, it is made clear that the exporter who avails drawback under Column (4) and (5) i.e. Higher drawback has to satisfy the condition that no refund of IGST paid on export product shall be claimed. In this case, the petitioner has availed Higher drawback after giving declaration that no refund of IGST shall be claimed. In this case, after availing the higher drawback, now the petitioner is claiming for....
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....er of goods or services i.e. exporter avails drawback in respect of Central tax or claims refund of the integrated tax paid which is Higher drawback. I say and submit that as per the referred provisions, they clearly debar any exporter from availing IGST refund if the exporter has already availed Higher drawback. In this case also, the Petitioner has availed Higher drawback and therefore the IGST refund has been legally denied as per Section 16 of the IGST Act, 2017 read with provisions of Section 54 of the CGST Act, 2017. 16. In response to para 5.B of the Petition, I say and submit that the Petitioner alleged that the in spite of returning the differential drawback (Higher drawback - Lower drawback) amount, the Respondent authorities have not sanctioned the IGST refund amount. I submit that entire IGST refund mechanism is system based and processed electronically. I submit that there is no manual intervention in the mechanism unless there is any error committed by the exporter while filing GST returns or shipping bill. I say and submit that presently, there is no option available in the system to consider the claim of the petitioner. I further say and submit tha....
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....Petition, I say and submit that the above paras explain the process of sanctioning of the IGST refund, the same further clarify the reasoning as to why the Petitioner is ineligible for the IGST refund when they have already availed the Higher drawback. In respect of this, the Central Board of Indirect Taxes and Customs (CBIC) has examined the issue and issued circular 37/2018-Cus dated 9.10.2018. A copy of the circular dated 09.10.2018 is annexed hereto and marked as Annexure: E. I submit that from the above circular, it is made clear that the simultaneous availing of higher drawback and IGST refund is not permissible in the eyes of law. I submit that in the present case, the Petitioner has demanded the IGST refund after payment of the differential drawback amount. I submit that the same is not a legal procedure which can be accepted and it is not possible to be considered as the entire IGST refund mechanism is system based. I further say and submit that the Petitioner has consciously relinquished the IGST refund claim for claiming the Higher drawback. I submit that the law is very specific and there are conditions to be followed to avail any benefits either IGST refund or....
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....e shall be applicable to export of a commodity or product if the exporter satisfies the following conditions, namely:- ... ... ... (ii) If the goods are exported on payment of integrated goods and services tax, the exporter shall declare that no refund of integrated goods and services tax paid on export product shall be claimed;.....' 2.3 In terms of Rules 12 and 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the shipping bill itself is treated as claim for drawback in terms of the declarations made on the shipping bill. 2.4 The declarations required in terms of above Notes and Conditions and provisions of the Drawback Rules are made electronically in the EDI System. When composite drawback rate was claimed (by declaring suffix A or C with Drawback serial number), exporter was required to tick DBK002 and DBK003 declarations in the shipping bills. In fact, for period 1.7.2017 to 26.7.2017, a manual declaration was also required to be given as the changes made on 26.7.2017 were made applicable for exports made from 1.7.2017 onwards. 2.5 By declaring drawback serial number suffixed with A or C and by maki....
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.... (4) of rule 96 of the rules, it was submitted that the claim for refund can be withheld only in the two eventualities mentioned therein, none of which are attracted in the present case. Reference was made to the email dated 28.11.2018 issued by the IGST Section, Customs House, Mundra drawing the attention of the petitioner to the Board Circular No.37/2018-Customs dated 9.8.2018 wherein it is clearly mentioned that by declaring drawback claim serial number suffixed with A or C, the exporters consciously relinquished their IGST/ITC claim. Reference was made to Circular No.37/2018-Customs dated 9.10.2018 to submit that the same does not relate to IGST and would have no applicability to the facts of the present case. It was submitted that in any case, the petitioner has already returned back the differential drawback amount, and hence, there is no impediment in the way of the respondents in granting the refund to the petitioner. 2. Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 24th January, 2019. " 20. Before adverting to the rival submissions canvassed on either side, we may refer to the three provisions o....
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.... goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of six months from the last day of the quarter in which such supply was received. (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than-- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of ....
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....f goods or services or both or on inputs or input services used in making such zero-rated supplies; (b) refund of unutilised input tax credit under subsection (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued; (d) refund of tax in pursuance of section 77; (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify. (9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or the rules made thereunder or in any other law for the time being in force, no refund shall be made except in accordance with the provisions of sub-section (8). (10) Where any refund is due under sub-section (3) to a registered person who has defaulte....
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....refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3). (2) "relevant date" means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,-- (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or (ii) if the goods are exported by land, the date on which such goods pass the frontier; or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished; (c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of-- ....
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....ied 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 information in Table 6A furnished under the first proviso shall be auto-drafted in FORM GSTR- 1 for the said tax period. (3) Upon the receipt of the information regarding the furnishing of a valid return in FORM GSTR-3 or FORM GSTR- 3B, as the case may be from the common portal, the system designated by the Customs or the proper officer of Customs, as the case may be, shall process the claim of refund in respect of export of goods and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities. (4) The claim for refund shall be withheld where,- (a) a request has been received from the jurisdictional Commissioner of central tax, State tax or Union territory tax to withhold the payment of refund due to the person claiming refund in accordance wit....
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....ection (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, 2017 or notification No. 79/2017-Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1299 (E), dated the 13th October, 2017." 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. 25. Section 54 of the CGST Act, 2017, provides that any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, shall make an application before the e....
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....and the claim for refund can be withheld only in the following contingencies : (a) a request has been received from the jurisdictional Commissioner of central tax, State tax or Union territory tax to withhold the payment of refund due to the person claiming refund in accordance with the provisions of subsection (10) or sub-section (11) of Section 54; or (b) the proper officer of Customs determines that the goods were exported in violation of the provisions of the Customs Act, 1962. 31. Mr.Trivedi invited our attention to two decisions of the Supreme Court as regards the binding nature of the circulars and instructions issued by the Central Government. 32. 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.), the Supreme Court observed as under : "4. Learned counsel for the Union of India submitted that the law declared by this Court is supreme law of the land under Article 141 of the Constitution of India, 1950 (in short the 'Constitution'). The Circulars cannot be given primacy over the decisions. 5. Learned counsel for the assessee on the other hand submitted th....
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....of majesty of law declared by this Court and the binding effect in terms of Article 141 of the Constitution. " 33. In the case of J.K.Lakshmi Cement Limited v. Commercial Tax Officer, Pali, reported in 2018(14) G.S.T.L. 497 (S.C.), the Supreme Court observed as under : "25. The understanding by the assessee and the Revenue, in the obtaining factual matrix, has its own limitation. It is because the principle of res judicata would have no application in spite of the understanding by the assessee and the Revenue, for the circular dated 15.04.1994, is not to the specific effect as suggested and, further notification dated 07.03.1994 was valid between 1st April, 1994 up to 31st March, 1997 (upto 31st March, 1997 vide notification dated 12.03.1997) and not thereafter. The Commercial Tax Department, by a circular, could have extended the benefit under a notification and, therefore, principle of estoppel would apply, though there are authorities which opine that a circular could not have altered and restricted the notification to the determent of the assessee. Circulars issued under tax enactments can tone down the rigour of law, for an authority which wields power for its own ....
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....e aid to its construction. The doctrine is based upon the precept that the words used in a statutory provision must be understood in the same way in which they are usually understood in ordinary common parlance by the people in the area and business. (See : G.P. Singh's Principles of Statutory Interpretation, 13th Edition-2012 at page 344). It has been held in Rohitash Kumar and others v. Om Prakash Sharma and others - (2013)11 SCC 451 that the said doctrine has to be applied with caution and the Rule must give way when the language of the statute is plain and unambiguous. On a careful scrutiny of the language employed in paragraph 3 of the notification dated 21.01.2000, it is difficult to hold that the said notification is ambiguous or susceptible to two views of interpretations. The language being plain and clear, it does not admit of two different interpretations. 29. In this regard, we may state that the circular dated 15.04.1994 was ambiguous and, therefore, as long as it was in operation and applicable possibly doctrine of contemporanea exposition could be taken aid of for its applicability. It is absolutely clear that the benefit and advantage was given under the ci....