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TMI Blog2022 (1) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court had an occasion to deal with the similar facts in the case of AWADKRUPA PLASTOMECH PVT. LTD. VERSUS UNION OF INDIA [ 2020 (12) TMI 1116 - GUJARAT HIGH COURT] , whereby reliance was made upon the Circular 37/2018-Customs dated 09.10.2018, whereby the competent Authority had withheld the refund of IGST on the ground that exporters had availed the option to take drawback at higher rate in place of the IGST refund out of their own volition. - Refund allowed. Rate of interest - HELD THAT:- There is a direct binding decision of this Court, which is rendered in favour of the assessee holding the assessee entitled to the refund of IGST. Despite the aforesaid decision of this Court in the case of Amit Cotton Industries [ 2020 (12) TMI 1116 - GUJARAT HIGH COURT] , for the reasons best known to the adjudicating authority, the adjudicating authority has failed to abide by the aforesaid decision and has chosen not to take decision with regard to the refund of IGST. To repeat, on going through entire record, the stand of the respondent Authority to withhold IGST based on non-consideration of Judicial pronouncement is equally irrational and arbitrary. The respondent Authorities are direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawback at higher rate by punching option "5202A" and option "600699A" instead of claiming drawback at lower rate by punching option "5202B" and option "600699B", while generating shipping bills. It is claimed by the petitioners that having realized the aforesaid mistake, vide letter dated 12.09.2017, had immediately requested the Deputy Commissioner of Customs (Export), Customs House, Mundra, to amend the aforesaid shipping bills in exercise of powers conferred under Section 149 of the Customs Act, 1962. The request was also made to the effect of punching of "A" to be treated as punching of "B". On 15.09.2017, the petitioner Company had submitted to the Deputy Commissioner of Customs (Exports), Customs House, Mundra to consider their case for IGST refund and had further disclosed their intention to not to claim higher drawback thereby showing their willingness to give back differential drawback amount. In furtherance thereof, the petitioner Company had drawn Demand Drafts bearing Nos.332754 and 332755, dated 17.10.2017 and Demand Draft No.044281, dated 13.09.2017 for an aggregate amount of ₹ 3,39,245/- towards differential drawback amount with interest and the said Demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt was also drawn to Rule 96 of the CGST Rules, 2017 and it was further contended that shipping bill filed by the exporter of goods shall be deemed to be an application for refund of integrated tax paid on goods exported out of India and such application shall be deemed to have been filed only when the person in charge of conveyance carrying the export goods duly files an export manifest or an export report covering the number and date of shipping or bills of export. It was, therefore, submitted that the petitioner applied under the provisions of law inasmuch as the petitioner had furnished a valid return in the form of GSTR-3 and / or Form GSTR-3B. However, inadvertently, while generating the shipping bills, the petitioner had claimed drawback at higher rate by punching option of "5202A" and punching option of "600699A" instead of claimed drawback at lower rate by punching option of "5202B" and option of "600699B". In view of the aforesaid mistake, the aggregate amount of drawback of ₹ 4,22,900/- (at higher rate) was inadvertently claimed instead of ₹ 89,807/- (at lower rate). The attention of this Court was drawn to the tabular details furnished in para 6.3 which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in shipping bills in terms of Section 149 of the Customs Act, 1962. The learned advocate Mr. Trivedi has further referred to and relied upon the decision rendered by this Court in the case of Amit Cotton (supra) and has urged to direct the respondent authorities to forthwith release the refund of IGST, with interest. Learned advocate for the petitioners has pressed into service, the decision of this Court in the case of Shri Jagdamba Polymers Ltd. Vs. Union India reported in 2013(289) E.L.T. 429 (Guj.) as well as the decision in the case of Purnima Advertising Agency Pvt. Ltd. Vs. Union of India reported in 2016(42) S.T.R. 785 (Guj.) and has submitted that the petitioner should be compensated for the prejudice caused due to inordinate delay because of inaction on the part of the respondent Authorities in taking decision with regard to the refund of IGST by awarding interest from the date of raising bills till its actual payment. 7. Aforesaid prayer of the petitioner is objected by the respondent Authorities by filing affidavit in reply, which is filed through the Assistant Commissioner of Customs, on behalf of the respondent Nos.1 to 3 herein. The respondent Authorities have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGST Act, 2017, Section 54 of the CGST Act and Rule 96 of CGST Rules, 2017 are reproduced below: "16. Zero rated supply.-- (1) "zero rated supply" means any of the following supplies of goods or services or both, namely:-- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documentary or other evidence (including the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person: Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person. (5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57. (6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be; (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law. Explanation.--For the purposes of this sub-section, expression "specified date" shall mean the last date for filing an appeal under this Act. (11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine. (12) Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be notified on the recommendations of the Council, if as a result of the appeal or further proceedings he becomes entitled to refund. (13) Notwithstanding anything ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of such judgment, decree, order or direction; (e) in the case of refund of unutilised input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises; (f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment of tax." Rule 96: Refund of integrated tax paid on goods or services exported out of India.-- (1) 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:- (a) the person in charge of the conveyance carrying the export goods duly files a departure manifest or an export manifest or an export report covering the number and the date of shipping bills or bills of export; and (b) the applicant has furnished a valid return in FORM GSTR- 3 or FORM GSTR-3B, as the case may be; (2) The details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -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 applicant becomes entitled to refund of the amount withheld under clause (a) of sub-rule (4), the concerned jurisdictional officer of central tax, State tax or Union territory tax, as the case may be, shall proceed to refund the amount after passing an order in FORM GST RFD- 06. (8) The Central Government may pay refund of the integrated tax to the Government of Bhutan on the exports to Bhutan for such class of goods as may be notified in this behalf and where such refund is paid to the Government of Bhutan, the exporter shall not be paid any refund of the integrated tax. (9) The application for refund of integrated tax paid on the services exported out of India shall be filed in FORM GST RFD-01 and shall be dealt with in accordance with the provisions of rule 89. (10) The persons claiming refund of integrated tax paid on exports of goods or services should not have received supplies on which the benefit of the Government of India, Ministry of Finance notification No. 48/2017-Central Tax, dated the 18th October ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the integrated tax paid on such goods so exported out of India. On bare reading of Section 54 referred to above along with Rule 96, more particularly Rule 96(a), it transpires that the claim for refund can be withheld only in two circumstances as provided in Sub-Clauses (a) and (b) respectively of clause (4) of Rule 96 of the Rules, 2017. 12. In the present case, admittedly, the shipping bills have been amended pursuant to the decision of the Superintendent of Customs (Export) as reflected in communication bearing No.VIII/48-834/EXP/AMD/ MP&SEZ/17-18 DATED 30.10.2017. It is not in dispute that the Demand Draft of differential drawback aggregating to an amount of ₹ 3,39,245/- has been realized by the respondent Authorities. So far as issue of whether the respondents are justified in withholding the refund of IGST paid by the exporter of the goods i.e. "Zero Rated Supply" is concerned, is no more res integra. This Court had an occasion to deal with such issue in the similar set of facts of the case. 13. In the case of Amit Cotton Industries Vs. Principal Commissioner of Customs reported in [2019] 107 taxmann.com167(Gujarat) is concerned, the relevant observations are reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing bill that the exporter may file is deemed to be an application for refund of the integrated tax paid on the goods exported out of India and the claim for refund can be withheld only in the following contingencies : (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 subsection (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. --- --- 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." 14. So far as the issue with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation and, therefore, principle of estoppel would apply, though there are authorities which opine that a circular could not have altered and restricted the notification to the determent of the assessee. Circulars issued under 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." Thus, such Circulars are merely in the form of instructions or guidance to the concerned Department and it explains the provisions of drawback, however, it has nothing to do with the IGST refund. More particularly, Rule 96 of GCST Rules, 2017 is explicitly clear on the said aspect. 15. Even recently this Court had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually paid to the writ applicant within the period of six weeks from the date of the receipt of this order,then interest would start accumulating at the rate of 9% and the amount shall be paid accordingly." 16. So far as prayer of the petitioners to grant interest @ 18% on the amount of refund of IGST is concerned, we have carefully gone through the decisions relied upon by the petitioners in the case Jagdamba Polymers Ltd. (Supra) and Purnima Advertising Agency Pvt. Ltd. (Supra). In both the aforesaid decisions, the issue with regard to entitlement of the interest at appropriate rate for delay in not paying the refund and also for paying interest on interest was under consideration. In the aforesaid decisions, the facts indicate that the petitioners therein have prayed for refund prior to insertion of Section 11BB in the Central Excise Act, 1944, which had been inserted w.e.f. 26.05.1995 thereby providing for interest on delayed refund. In the present matter, the issue relates to inaction of the respondent Authorities in not taking decision with regard to the refund of IGST with regard to the goods exported i.e. at "Zero Rated Supplies". Akin provisions in form of Section 56 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made payment of differential amount which has been realized by the respondent Authorities. Thereafter, the petitioners have also made various representations, which are placed on record. In fact, the issue with regard to withholding of refund of IGST in connection with the goods exported i.e. "Zero Rated Supplies" vis-a-vis wrong drawback claim has been settled in view of the case of Amit Cotton Industries (Supra) decided on 22.07.2019. The aforesaid decision was further challenged by the respondent Authorities by way of filing appeal being Special Leave Petition (Civil) Diary No.5502 of 2021 before the Hon'ble Supreme Court, which came to be dismissed vide order dated 22.03.2021. Thus, there is a direct binding decision of this Court, which is rendered in favour of the assessee holding the assessee entitled to the refund of IGST. Despite the aforesaid decision of this Court in the case of Amit Cotton Industries (Supra), for the reasons best known to the adjudicating authority, the adjudicating authority has failed to abide by the aforesaid decision and has chosen not to take decision with regard to the refund of IGST. At this stage, it would be worth to refer to the ratio laid dow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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