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2019 (5) TMI 85 - HC - GSTRefund of IGST - export of Polished Granite Slabs - clerical error in the shipping bill - CBEC, Ministry of Finance, Government of India, issued a Circular No.8/2018, dated 23.03.2018 - Rule 96A of CGST Rules, 2017. HELD THAT - Admittedly, due to wrong mentioning of the drawback code by the petitioner, refund of IGST for the aforementioned shipping bills could not be processed by the respondents - It is evident from the Circular that the Government of India has provided an alternate mechanism in cases where, the exporters have committed errors in the shipping bills filed by them before the Customs Authority. The case on hand will clearly indicate that only due to inadvertence, the drawback code in the shipping bill was wrongly mentioned as 680203A instead of 680203B. Further, it is undisputed by the respondents as seen from Paragraph No. 11 of the counter affidavit filed by them that IGST refund is payable for the aforementioned shipping bills to the petitioner. But only due to the fact that Export General Manifest for the shipping bills have been closed by the computer system, it is not possible to refund the IGST amount to the petitioner. The petitioner cannot be made helpless, just because the computer system does not enable them to refund the IGST amount. Being an undisputed fact that IGST refund is payable to the petitioner, the petitioner is absolutely entitled to the IGST refund from the respondents. The respondents ought to have refunded the IGST amount for the aforementioned shipping bills to the petitioner - the respondents are directed to refund the undisputed IGST amount payable to the petitioner for the below mentioned Shipping Bill - petition allowed.
Issues Involved:
1. Entitlement to IGST refund for exported goods. 2. Error in drawback code declaration. 3. Applicability of CBEC Circulars for error rectification. 4. Respondents' inability to process IGST refund due to system constraints. Detailed Analysis: 1. Entitlement to IGST Refund for Exported Goods: The petitioner, a regular exporter of Polished Granite Slabs, sought a mandamus directing the second respondent to settle and release the pending refund of IGST paid on specific shipping bills. The petitioner argued that under Rule 96A of CGST Rules, 2017, shipping bills filed by an exporter are deemed applications for refund of integrated tax paid on exported goods. Despite this, the refund was not processed, allegedly due to the petitioner availing a higher drawback rate. 2. Error in Drawback Code Declaration: The petitioner admitted to an inadvertent error in declaring the drawback code as 680203A instead of the correct 680203B in the shipping bills. This mistake led to the non-processing of the IGST refund by the respondents, as the system automatically rejects such discrepancies. The respondents acknowledged this error in their counter affidavit but stated that the computer system could not process the refund once the Export General Manifest (EGM) was closed. 3. Applicability of CBEC Circulars for Error Rectification: The petitioner cited several CBEC Circulars, particularly Circular No. 8/2018-Cus dated 23.03.2018, which provides an alternative mechanism for rectifying errors in shipping bills through officer interface. The petitioner argued that this circular applies to their case, as it addresses similar inadvertent errors made by exporters. The respondents did not dispute the applicability of these circulars but contended that the system constraints prevented the refund processing. 4. Respondents' Inability to Process IGST Refund Due to System Constraints: The respondents admitted that the IGST refund was payable but could not be processed due to the computer system's limitations. The system does not allow amendments once the EGM is closed, and the shipping bill status is archived. The petitioner argued that this technicality should not deprive them of their rightful refund, especially when the error was acknowledged and alternative mechanisms were available. Discussion and Judgment: The court acknowledged the petitioner's entitlement to the IGST refund and noted the respondents' admission of the error and the system's constraints. The court referred to CBEC Circular No. 8/2018-Cus, which provides an alternative mechanism for rectifying such errors. The court emphasized that the petitioner should not be deprived of the refund due to a technical error and system limitations. The court directed the respondents to refund the undisputed IGST amount for the specified shipping bills within eight weeks from the date of receipt of the order. The writ petition was allowed, and the connected miscellaneous petition was closed with no costs.
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