TaxTMI 
TaxTMI 
2024 (7) TMI 1107
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....ees Twenty Two Crore Fifty Lakh Fifty Three Thousand One Hundred and Two only) (IGST: Rs. 22,50,53,102/-) made on M/s. Shobikaa Impex Private Limited, Karur towards the ineligible refund of IGST paid on exports availed by them during the period from January, 2019 to September, 2020, made under Section 74(1) of Central Goods and Services Act, 2017 read with the Section 20 of the IGST Act, 2017 along with the corresponding provisions of the SGST Act and I determine the same under Section 74(9) of the CGST Act, 2017 read with read with the Section 20 of the IGST Act, 2017 along with the corresponding provisions of the SGST Act; ii. I order that M/s. Shobikaa Impex Private Limited, Karur shall pay interest at appropriate rates on the amount confirmed as in Sl.No.(i) above, under the provisions of Section 50 of the CGST Act, 2017 read with the Section 20 of the IGST Act, 2017, along with the corresponding provisions of the SGST Act; and iii. I impose a penalty of Rs. 22,50,53,102/- (Rupees Twenty Two Crore Fifty Lakh Fifty Three Thousand One Hundred and Two only) on M/s. Shobikaa Impex Private Limited, Karur under Section 122 (2)(b) of the CGST Act 2017 read with the S....
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....fered on the inputs used in the manufacture of export goods is refunded to the taxpayer. However, when tax has not been paid on the goods used in the manufacture of export goods, refund of IGST would tantamount to encashment of ITC. Thus the provisions of Rule 96(10) was formulated to prevent encashment of ITC and to give refund of IGST only where tax paid inputs were used for manufacture of export goods. Thus, after insertion of the Rule 96(10) of CGST Rules, 2017, the said rule effectively bars any exporter who had availed the benefits under Notification No. 48/2017- Central Tax dated the 18.10.2017, Notification No. 78/2017- Customs dated 13.10.2017 and Notification No. 79/2017-Customs dated 13.10.2017, from paying IGST on export goods, including by way of utilizing ITC, and getting refund of the same and this rule applies to all exporters in general. The only criteria to be seen for determining the eligibility of an exporter for paying IGST on export and getting refund of the same, is whether the exporter had availed the benefits under the above said notifications while procuring inputs. On applying the above criteria, it is clearly seen that M/s. Shobikaa Impex, Karur, having ....
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....ned under Rule 89(4B) so that the legislative intention is not defeated. From the reply furnished by the Noticee itself, it is quite clear that the Noticee is well aware of the fact that they are not eligible for claiming refund of IGST paid on export goods and they, in the normal course, ought to have applied for eligible refund in terms of Rule 89(48) of CGST Rules, 2017 only. However, the Noticee had consciously opted to pay IGST on export goods and availed refund of the same to the tune of Rs. 22,50,53,102/-under Rule 96 of the CGST Rules, 2017. This is evident from the fact that even after starting to pay IGST on exports and claiming refund of the same in terms of Rule 96(1) of the CGST Rules 2017, the taxpayer have also cleared the export goods without payment of duty on LUT/Bond. Since the Noticee had availed refund of IGST in contravention of provisions under Rule 96(10) of CGST Rules, 2017, the present proceedings have been initiated against them to recover the ineligible refund of IGST availed by them. 31. In their reply to the notice, the Noticee have stated that the eligible refund of ITC on input and input services under Rule 89(4B) is Rs. 21,35,08,672/- and t....
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....oner (Appeals) in remanding the case back to the lower authority to determine and sanction the eligible refund under Rule 89(4B). In the above case, the appellant have duly filed refund claim under Rule 89 following the conditions stipulated thereunder for claim of refund of unutilized ITC on account of exports without payment of tax. The appellant had filed refund as per the formula stipulated in Rule 89(4) as sub-rule (4B) of Rule 89 does not provide any formula and the dispute in this case is how to arrive at the quantum of ITC availed in respect of inputs or input services to the extent used in exporting the goods. In the affidavit filed by the department, it was stated that such quantum can be arrived in terms of Input- Output ratio of the inputs and raw materials used in the manufacturing of exported goods. Accordingly, the case was remanded back for adjudication of the claim of the writ applicant in accordance with Rule 89(4B) keeping in mind the formula of input- output ratio as stated by the department in the affidavit filed in that litigation. Thus, the issue in the above cited case was essentially on the formula to be adopted for arriving at the quantum of ITC in respect....
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....IGST on exports and claiming refund of the same in terms of Rule 96(1) of the CGST Rules, 2017, the taxpayer have also cleared the export goods without payment of duty on LUT / Bond. From the factual position as above, it is clearly discernible that the tax payer is well aware that when exemption under Notifications No. 48/2017-Central Tax, dated the 18th October, 2017, No.78/2017 Customs dated 13.10.21017 and No. 79/2017 Customs dated 13.10.2017 are availed on procuring inputs, they are not entitled for refund of any IGST paid on exports. In spite of the clear legal position as above, the taxpayer had deliberately paid IGST on exports and availed refund of the same, thus deliberately contravened the provisions of Rule 96(10) of the CGST Rules, 2017. In the case of refund of IGST paid on exports, the same is processed by the Gateway Customs Authorities based on the Shipping Bill, GSTR-1 and GSTR-3B where the Shipping Bill itself is deemed to be a refund application, and in such cases, the ITC utilized for payment of IGST can be of any type including ITC on Capital Goods. Where there in an express restriction on getting refund of IGST paid on exports, the Noticee preferred to pay IG....
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....pondent periodically as and when the refund claims were filed by the petitioner under Rule 96 of the CGST Rules, 2017. 5. The learned counsel for the petitioner submitted that the shipping bills that were filed for export of the goods were treated as the refund claim for the purpose of Rule 96 of the CGST Rules. The learned counsel further submitted that the total amount of refund claim that was ordered during the period is Rs. 22,50,53,102/- and that after the admission of this Writ Petition, the petitioner has also reversed the proportionate amount of Rs. 1,15,00,000/- and further sum of Rs. 49,59,000/- towards interest on 22.12.2022. 6. It is further submitted that the amount has been remitted by debiting the Electronic Cash Register of the petitioner. It is submitted that this was possible only in view of the amendment to Rule 96 of the CGST Rules, 2017, vide Notification No.14/2022-Central Tax, dated 05.07.2022, which replaced Sub-Rule 5A, 5B and 5C. It is therefore, submitted that the liability has been squared up and therefore, the impugned order be quashed. 7. It is further submitted that pursuant to the amendment to Rule 96 of the CGST Rules, the Board has also is....
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....d not have - (a) 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 except so far it relates to receipt of capital goods by such person against Export Promotion Capital Goods Scheme 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 has been availed; or (b) availed the benefit under notification No. 78/2017-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 1272(E), dated the 13th October, 2017 or notification No. 79/2017-Customs, dated the....