TaxTMI 
TaxTMI 
2024 (8) TMI 1060
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....issioner rejecting the refund claim of Mayur. 3. Customs Appeal No. 51895 of 2021 is filed by JLC Electroment Pvt. Ltd. [JLC] to assail the Order-in-Appeal dated 16.06.2021 which upheld the Order-in-Original dated 15.02.2020 passed by the Joint Commissioner rejecting the refund claim of JLC. 4. Both appellants imported goods under advance authorizations issued by the Directorate General of Foreign Trade DGFT availing the benefit of Notification No. 18/2015-Cus dated 01.04.2015, as amended by Notification no. 79/2017-Cus dated 13.10.2017. They cleared goods on self-assessment without any re-assessment by the officers. Later, they realized that the exemption from IGST available under the notification was subject to pre-import condition, which they had not fulfilled. Therefore, they re-determined the liability on the imports and paid the IGST on the basis of their own assertion along with interest under section 28 (I)(b). Thereafter they filed refund claims asking for refund of the interest which they had paid asserting that no interest was payable on the IGST on imported goods even if the IGST was paid after delay. On a query from the Bench learned counsel for the appellant cla....
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....e on the supply in the course of import of goods under Advance Authorisation. Exemption from payment of IGST was available subject to 'pre-import' condition. The appellants had not fulfilled this condition but self-assessed Bills of Entry claiming exemption from IGST. Later, realizing their mistake, the appellants requested for re-assessment levying IGST and they paid the re-assessed IGST along with applicable interest. Thus, no excess IGST and interest thereon was paid by the claimant and hence their applications for refund of interest were rejected. iv) The levy of IGST on supply in the course of import is under section 5 of IGST Act, 2017 and section 3(7) of Customs Tariff Act,1975. v) Section 20 of IGST Act,2017 made several provisions of the CGST Act applicable to IGST including section 50 of CGST Act,2017 which provides for interest on delayed payment of tax. Thus, there is statutory provision for levy of interest on delayed payment of tax. vi) Alternatively, if the provisions of Customs Act and the Customs Tariff Act are considered, section 3(12) of the Customs Tariff Act, 1975 reads as follows: "Section3 (12) The provisions of th....
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....ds is paid after a delay? 9. The refund claims were filed relying on the judgment of the Bombay High Court in the case of Mahindra & Mahindra. The appellants themselves have neither contested their own assessments nor have they been modified. The question which arises is can one assessee claim refund on the basis of a decision in the case of another assessee? To answer this question, the nature of refund proceedings must be understood. Refunds are in the nature of execution proceedings and do not determine the mutual rights and liabilities between the assessee and the Revenue. They are simple cases refunding the money which is due to the assessee as per the assessment. The counterpart of this is the recovery of arrears by the department under section 142 of the Customs Act or similar provisions in other laws. Neither can the assessee claim refund nor can the department recover any amounts as arrears beyond the assessed tax or duty. If a judgment is delivered by a court in a case with respect to an assessee, it does not automatically increase or reduce the liabilities of every other assessee who is similarly placed. Otherwise, it will create utter chaos and confusion. For instanc....
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....te. 13. Duties of Customs are levied under the powers of Union under Article 246 read with entry 83 of List I (Union List) of the Seventh Schedule. These read as follows: 246. Subject-matter of laws made by Parliament and by the Legislatures of States (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List 1 in the Seventh Schedule (in this Constitution referred to as the "Union List"). (2) Notwithstanding anything in clause (3), Parliament and subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List"). (3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the 'State List'). (4) Parliament has power to make laws with respect to any matter for any part of the territory of India n....
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....(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Explanation.-The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council." 18. Article 269A provides for apportionment of IGST between the Union and States as provided by the Parliament on the recommendations of the Goods and Services Tax Council. It also has an explanation according to which the supply in the course of importation is deemed to be inter-state supply. This article is reproduced below. "Article 269A- Levy and collection of goods and services tax in course of inter-State trade or commerce 1) Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. ....
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....s may be notified by the Government on the recommendations of the Council. ******" 20. Section 3 (7)and (8) of the Customs Tariff Act, 1975 reads as follows: "3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges.- (7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent. as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8). (8) For the purposes of calculating the integrated tax under sub-section (7) on any imported article where such tax is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 (52 of 1962), be the aggregate of- (a) the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (b) any duty of customs chargeable on....
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....ods and Services Tax Banking Cash Transaction Tax 0036 Customs 0037 Union Excise Duties 0038 Sales Tax 0040 Service Tax 0044 Other Taxes and Duties on Commodities and Services 0045." 23. Thus, IGST is accounted for under the Major Head '0008' as a part of the Goods and Services Tax while Customs duties are accounted for under the Major head '0037' as a part of "Taxes on Commodities and Services other than GST". Such separate accounting of Customs duties and IGST is essential because IGST has to be apportioned between the Centre and the States as per Article 269A. Customs duties are not covered by Article 269A. 24. The Receipt budget for 2024-2025 also gives a break up of various types of Customs duties and GST received as follows: "5. Customs 5.01. Import Duties 5.01.01. Basic Duties (including through Debit of Scrips) 5.01.01.01. Other than debits of Scrips 0037 5.01.01.02. Through Debit in Ledger due to various scrip based schemes 0037 Total-Basic Duties (including through Debit of Scrips) 5.01.02. Additional Duty on Customs(CVD) 0037 5.01.03. Nation....
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.... 28. The last question to be answered by us if interest is payable on IGST which is paid late. The submission of the learned counsel for the appellant is that Bombay High Court held in Mahindra and Mahindra that no interest is chargeable on the additional duty of customs levied under section 3 of the Customs Tariff Act, 1975 and therefore no interest can be charged on the IGST. We find that this judgment was delivered in a matter where the SCNs were issued in 2004 and 2005 well before the GST was introduced in 2017. At that time, Additional duty of Customs was leviable under section 3 of the Customs Tariff Act, 1975. After the introduction of the GST in 2017, section 3 was completely re-written and instead of 'additional duty of customs' equivalent to the duties of excise, IGST at the same rate as leviable under IGST Act became leviable when goods are imported. No judgment of any High Court or Supreme Court has been brought to our notice in which it is held that no interest is chargeable on delayed payment of IGST. Therefore, reliance on Mahindra and Mahindra is misplaced. 29. It also needs to be noted that the charge of IGST is not just under section 3 of the Customs Tariff Ac....