TaxTMI 
TaxTMI 
2022 (10) TMI 1259
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....to the goods exported to the countries mentioned in the respective shipping bills i.e. 'Zero Rated Supplies' made vide aforesaid shipping bills as tabulated in para 5.5 hereinabove; b. to direct the respondent authorities to pay interest @ 18% to the petitioner herein on the amount of refund of IGST mentioned hereinabove from the date of shipping bill Nos. (01) 7667573 dtd. 28/07/2017, (02) 7928755 dtd. 10/08/2017 and (03) 7975605 dtd. 11/08/2017 respectively up till the date on which the amount of refund is paid to the petitioner. 5. The petitioner is a partnership firm. Petitioner is also registered with the Goods and Service Tax Department and holds GST Registration No. 24AAEFJ3419J1ZH. Petitioner firm was engaged in export of VT pumps, Spindle, Flange, Rubber Busg Nitrile, Impeller etc. to (1) M/s. STE UTIMEX AGRICOLE SARL, MOROCCO, (2) SARL AGRODEEL EQUIPMENT, ALGERIE, (3) D.A.A., CASABLANCA, in the months of July and August 2017 respectively. 5.1) The goods exported out of India, are to be termed as 'Zero Rated Supply' in accordance with Section 16 of Integrated Goods & Service Tax Act, 2017 (For short "IGST Act, 2017"). 5.2) According to the said provision, a regist....
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....ioner. 5.6) Though exports were made by the petitioner in July and August 2017, but till date, IGST is not refunded and as such, no reason for withholding the amount of refund is assigned by the respondent authorities so far. 5.7) The petitioner also approached respondent Nos. 2 and 3 and requested them to sanction the refund of IGST. However, as refund of IGST was not sanctioned to the petitioner, the CHA of the petitioner Mr. Somesh Landa of M/s. Cargotrans Maritime Agencies Pvt. Ltd. visited the office of respondent No. 2 and made request for crediting refund of IGST in the bank account of the petitioner company at the earliest. 5.8) During personal visits, said CHA of the petitioner was orally informed that while generating shipping bill, petitioner had claimed higher rate of drawback by punching 'A' instead of lower rate of drawback by punching 'B' and that was the only reason why refund of IGST could not be sanctioned. 5.9) The petitioner had also submitted letter dated 10.05.2022 on 12.05.2022 before the respondent No.3 with a request to pay IGST refund, however as per the petitioner neither the refund is paid nor any reply is given by the respondents. 5.10) Subsequ....
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....ate of receipt of application by crediting the refund to the fund referred to in section 57 read with section 54(5) and section 54(7) of the CGST Act, 2017. However, as provided in section 54(8) of the CGST Act, 2017 instead of crediting the refund amount to the fund, same should be refunded to the petitioner at the earliest because it is a case of refund of tax paid on 'Zero Rated Supply'. Reliance was also placed on Rule 96 of the CGST Rules, 2017 to submit that the shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of the conveyance carrying the export goods duly files a departure manifest or an export report covering the number and the date of shipping bills or bills of export. It was pointed out that the applicant has submitted a valid return in Form GSTR-3 or Form GSTR-3B and the documents mentioned in Rule 96 i.e. shipping bill was generated and Export General Manifest was also generated and therefore, upon filing the valid return in GSTR-3B after paying IGST in the months of July and August,....
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....e actual realisation of the amount of refund. 7. On the other hand, learned advocate Mr. Nikunt Raval appearing for the respondents submitted that the processing of the refund claim is an automatic process by Customs EDI System which has an in-built mechanism to automatically grant refund after validating the shipping bill data available in ICES against the GST return data transmitted by GSTN. It was submitted that if the necessary matching is successful, ICES portal would process the claim for refund and the relevant amount of IGST paid with respect to each Shipping Bill or Bill of Export would be electronically credited to the bank account of the petitioner registered with the Customs Authorities. 7.1) It was pointed out that the petitioner had claimed the drawback by selecting "Category-A" instead of "Category- B" on export of their goods in the month of July, 2017 to August, 2017 at the time of filing subject Shipping Bills. As per EDI System, it has been revealed that the petitioner has filed their Shipping Bills in ICEGATE where higher rate of drawback was obtained voluntarily by adding Suffix 'A' with drawback serial number instead of IGST. It was therefore, submitted that....
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....ible to claim refund under either of the following options, namely:-- (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder." 9. Section 54 of the CGST Act, 2017 provides for refund of IGST of the 'Zero Rated Supply' as defined in section 16 of the IGST Act, 2017 immediately after the goods are exported. Section 54(1) reads as under: "54. Refund of tax.-- (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance ....
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....ectronically 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 with the provisions of sub-section (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. (5) Where refund is withheld in accordance with the provisions of clause (a) of sub-rule (4), the proper officer of integrated tax at the Customs station shall intimate the applicant and the jurisdictional Commissioner of central tax, State tax or Union territory tax, as the case may be, and a copy of such intimation shall be transmitted to the common portal. (6) Upon transmission of the intimation under sub-rule (5), the proper officer of central tax or State tax or Union territory tax, as the case may be, shall pass an order in Part B of FORM GST RFD-07. (7) Where the appli....
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.... withheld refund of IGST of Rs.2,26,087/- in the bank account of the petitioner stating that the petitioner has claimed higher rate of drawback and therefore, the system of the department has not sanctioned the refund of IGST paid by the petitioner in view of Circular No. 37/2018-Customs, dated 09.10.2018 and Notification 131/2016 - Custom (N.T) dated 31.10.2016 as amended by Notification 59/2017 dated 29.06.2017 is not tenable. 13. Notification No. 131/2016 provides for denial of drawback specified in the schedule which is amended by Notification no.59/2017 on enactment of CGST Act, 2017 which includes exporters claiming refund of integrated goods and service tax on such exports. Notification No.37/2018 provided for denial of refund of IGST, however, such notification was issued subsequent to the date of exports made by the petitioner. 14. Circular No.37/2018 came up for consideration before this Court in case of Amit Cotton Industries (supra), wherein after considering the relevant provisions, it was held as under: "27. In the aforesaid context, the respondents have fairly conceded that the case of the writ-applicant is not falling within sub-clauses (a) and (b) respectively ....
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....culars cannot be given primacy over the decisions. 5. Learned counsel for the assessee on the other hand submitted that once the circular has been issued it is binding on the revenue authorities and even if it runs counter to the decision of this Court, the revenue authorities cannot say that they are not bound by it. The circulars issued by the Board are not binding on the assessee but are binding on revenue authorities. It was submitted that once the Board issues a circular, the revenue authorities cannot take advantage of a decision of the Supreme Court. The consequences of issuing a circular are that the authorities cannot act contrary to the circular. Once the circular is brought to the notice of the Court, the challenge by the revenue should be turned out and the revenue cannot lodge an appeal taking the ground which is contrary to the circular. 6. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and....
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....er tax enactments can tone down the rigour of law, for an authority which wields power for its own advantage is given right to forego advantage when required and considered necessary. This power to issue circulars is for just, proper and efficient management of the work and in public interest. It is a beneficial power for proper administration of fiscal law, so that undue hardship may not be caused. Circulars are binding on the authorities administering the enactment but cannot alter the provision of the enactment, etc. to the detriment of the assessee. Needless to emphasise that a circular should not be adverse and cause prejudice to the assessee. (See : UCO Bank, Calcutta v. Commissioner of Income Tax, West Bengal - (1999)4 SCC 599. 26. In Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries - (2008)13 SCC 1, it has been held that circulars and instructions issued by the Board are binding on the authorities under respective statute, but when this Court or High Court lays down a principle, it would be appropriate for the Court to direct that the circular should not be given effect to, for the circulars are not binding on the Court. In the case at hand, onc....
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.... absolutely clear that the benefit and advantage was given under the circular and not under the notification dated 07.03.1994, which was lucid and couched in different terms. The circular having been withdrawn, the contention of contemporanea exposition does not commend acceptation and has to be repelled and we do so. We hold that it would certainly not apply to the notification dated 21.01.2000." 34. We take notice of two things so far as the circular is concerned. Apart from being merely in the form of instructions or guidance to the concerned department, the circular is dated 9th October 2018, whereas the export took place on 27th July 2017. Over and above the same, the circular explains the provisions of the drawback and it has nothing to do with the IGST refund. Thus, the circular will not save the situation for the respondents. We are of the view that Rule 96 of the Rules, 2017, is very clear. 35. In view of the same, the writapplicant is entitled to claim the refund of the IGST. 36. In the result, this writ application succeeds and is hereby allowed. The respondents are directed to immediately sanction the refund of the IGST paid in regard to the goods exported, i.e. &....