2024 (3) TMI 328 - HC - GST

Refund of IGST paid on goods exported - claim of higher duty drawback - Constitutional validity of Paragraph 11(d) read with 12A(a)(ii) of the Notes and Conditions of the N/N. 131/2016- Cus. (N.T.), dated 31.10.2016 - Circular No. 37/2018-CUSTOMS dated 09.10.2018 - HELD THAT - There are substance in the contentions as urged on behalf of the Petitioner that the Petitioner would be entitled to the refund of IGST paid by the Petitioner during the transitional period, after deducting the differential amount of duty drawback, in terms of what has been placed on record at Exhibit-G (at page 120 of the Petition). It is found from the Reply Affidavit that, on the factual matrix, no dispute has been raised in regard to the dis-entitlement of the Petitioner in regard to the quantum as described, in the Shipping Bills itself, which, in terms of Rule 96 of the CGST Rules would amount to applications for refund. Reference made to the observations of this Court in similar circumstances in the case of SATYEN POLYMERS PVT. LTD. VERSUS THE UNION OF INDIA AND ORS. 2023 (9) TMI 1238 - BOMBAY HIGH COURT where it was held that The Circular on which reliance is placed by the Respondents is dated 9th October, 2018, whereas the export was made on 25th July, 2017 and 5th September, 2017, which is much before the date of Circular. It is a settled position that the circular cannot be made applicable retrospectively. Even otherwise, the circular proceeds on a footing of claim of higher duty drawback and not where the rate of drawback is same and further more the circular also dose not deal with the rectification of mistake if suffix (A) is mentioned instead of suffix (B), while mentioning the HSN Code, which the facts in the instant case. The Respondent Authorities are directed to grant refund of IGST paid on goods exported by the Petitioner during the Transitional Period, after deducting the differential amount of duty drawback, i.e. grant refund of Rs. 30,04,591/- Rs. 36,47,039 (Rs. 7,13,830 Rs. 71,382) , along with appropriate interest on such refund from the date of the shipping bill till the date of actual refund - the amount be released with simple interest, at the rate of 7%, to the Petitioner within three weeks from the date an authenticated copy of this order is presented before the concerned officer - petition disposed off.

Summary

Issues involved:
The issues involved in this case are the validity of certain provisions of the Notification No. 131/2016-Cus. (N.T.) and Circular No. 37/2018-CUSTOMS, and the entitlement of the Petitioner to a refund of IGST paid on goods exported during the Transitional Period.

Validity of Provisions:
The Petition sought to declare Paragraph 11(d) read with 12A(a)(ii) of the Notification No. 131/2016-Cus. (N.T.) and Circular No. 37/2018-CUSTOMS as ultra vires and unconstitutional. The Court noted that similar issues had been addressed in previous judgments by different Courts. Citing the decisions in various cases, the Court highlighted that in similar circumstances, the Petitioners were allowed refunds of IGST paid on goods exported. The Court found substance in the contentions raised by the Petitioner regarding entitlement to the refund.

Refund of IGST:
The Court examined the memo of the Petition and the reply affidavit of the Respondents. It was observed that the Petitioner was entitled to a refund of IGST paid during the Transitional Period, after deducting the differential amount of duty drawback. The Court noted that no dispute was raised regarding the dis-entitlement of the Petitioner concerning the quantum described in the Shipping Bills, which, under Rule 96 of the CGST Rules, would qualify as refund applications.

Court's Observations:
The Court referred to its previous decisions in similar cases, emphasizing that the Circular on which the Respondents relied could not be applied retrospectively. It was noted that the Petitioner's case involved zero-rated supplies under the IGST Act, making them eligible for a refund. The Court highlighted that the Petitioner had not availed a higher duty drawback, which would have led to double benefits, and thus, the refund of IGST was justified.

Judgment and Relief:
In light of the above discussions, the Court allowed the Petition and directed the Respondents to refund the IGST paid by the Petitioner on the zero-rated supplies under the Shipping Bills. The Court ordered the refund of a specific amount along with interest as per the IGST Act. The Petition was allowed in terms of the relief sought regarding the refund of IGST paid during the Transitional Period. The Court directed the release of the amount within a specified timeframe with simple interest to the Petitioner.

Conclusion:
The Court disposed of the case, emphasizing that the refund should be processed by the respective authorities where the Shipping Bills were filed. No costs were awarded in this matter.