2023 (7) TMI 160 - HC - Customs

Refund of IGST paid in relation to the exports undertaken by it of goods - insulated cables - Export to a party based in Myanmar - claim of duty drawback at the higher rate of the IGST refund - HELD THAT - It appears that there is no factual foundation for the Respondents to come to such conclusion and, in fact, such a conclusion is contrary to the record, subject matter of consideration by the authorities. This is also clear from the notification dated 31st October 2016 prescribing common duty at 2% in respect of the goods in question. In a similar situation where the claim of the assessee was not a claim to take a drawback at higher rate, the Gujarat High Court in Awadkrupa Plastomech (supra) in considering a prior decision in M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS 2019 (7) TMI 472 - GUJARAT HIGH COURT , observed that is a situation when the claim made by the Petitioner was not to avail double benefit, that is of the IGST refund and the drawback, the Petitioner therein had become entitled to the IGST Refund. In the present case, the Petitioner is entitled to a refund of the IGST paid on the exports in question, as it is certain that this is not a case where the Petitioner is availing any double benefit that is of the IGST refund and a higher duty drawback. The Respondents are directed to refund to the Petitioner the IGST paid by the Petitioner in respect of the goods exported, i.e. zero rated supply, under shipping bills in question being an amount of Rs. 21,41,451/- with simple interest at 7% per annum with effect from 22nd February 2018 - the amounts be released within two weeks of the receipt of the authenticated copy of the present order by the concerned officer, authorised to release the amounts. The petition is allowed.

Summary

Issues involved:
The petition seeks a refund of IGST paid for exports of insulated cables to a party in Myanmar. The main contention is that the refund was denied despite compliance with prescribed procedures.

Details of the Judgment:

Issue 1: Refund of IGST paid for exports

The petitioner filed a GST Return with incorrect details, which were later corrected. Despite subsequent submissions and compliances, the refund was not granted. The petitioner raised grievances, but the responses were unsatisfactory. The court noted that the export was a zero-rated supply under the IGST Act. The Respondents did not dispute this and acknowledged that the export was eligible for a refund. The court referred to relevant provisions of the CGST Act and Rules, highlighting the entitlement to a refund for zero-rated supplies.

Issue 2: Allegation of claiming higher duty drawback

The Respondents alleged that the petitioner claimed a higher duty drawback, which led to the denial of the refund. However, the court found no factual basis for this assertion. Referring to precedents, the court emphasized that if the rates of duty drawback are the same, there is no question of denying the IGST refund. The court cited judgments from the Gujarat High Court and Delhi High Court, which allowed refunds in similar cases. The court concluded that the petitioner was entitled to the IGST refund without availing double benefits.

Final Judgment:

The court directed the Respondents to refund the IGST amount paid by the petitioner for the exports, along with simple interest. The amount was specified, and the release was ordered within a specific timeframe. The petition was allowed in favor of the petitioner, with no costs imposed.

This judgment highlights the importance of correct compliance with refund procedures and the entitlement to refunds for zero-rated supplies under the relevant tax laws. The court's decision underscores the need for authorities to accurately assess claims and not deny refunds based on unfounded allegations.