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TMI Blog2022 (2) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... ack at higher rate in case of IGST refund will need to punch accordingly in the EDI system and the mistake, which has been made by the petitioner in relation to the three bills where the refunds have not been given, the EDI system itself has not allowed the IGST refund. We are in complete disagreement with the respondents as not only the petitioner in subsequent correspondence with the respondents has made it completely clear that in the case of these exports the higher duty drawback and the lower duty drawback are the same, the case is covered by the decision of this Court rendered in case of M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS [ 2019 (7) TMI 472 - GUJARAT HIGH COURT] where the Court in detailed has discussed this very issue and held that respondents are directed to immediately sanction the refund of the IGST paid in regard to the goods exported, i.e. 'zero rated supplies', with 7% simple interest from the date of the shipping bills till the date of actual refund. As the issue raised before this Court is identical, no separate or independent discussion would be necessary to be made before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in regard to the goods exported zero rated supplies made vide Shipping Bills No.8465051, 8459617 and 8455069 dated 05.09.2017, 05.09.2017 and 14.09.2017 respectively. It is averred that the authority has illegally withheld the refund of the petitioner and the e-mail received on 14.09.2019 from ICEGATE stating that since drawback is claimed at a higher rate of refund of the petitioner, the same cannot be sanctioned under Section 54 of the Central Goods and Service Tax Act, 2017 ( the CGST Act hereinafter) read with Section 16 of the Integrated Goods and Service Tax Act, 2019 ( the IGST Act hereinafter. The petitioner is before this Court seeking following reliefs: 22 (A) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders or directions to the respondent authorities to immediately sanction the refund of IGST paid in regard to the goods exported i.e. Zero Rated Supplies made vide shipping bills mentioned hereinabove; (B) YOUR LORDSHIPS may be pleased to direct the respondent authorities to pay interest @ 9% to the petitioner herein on the amount of refund from the date of shipping bill till the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of the shipping bills or bills of export and the applicant has fulfilled all the requirements and a valid return was furnished in Form-GSTR-3 or Form GSTR-3B. 2.4 It is the case of the petitioner that inadvertently the Custom House Agent (CHA)failed to disclose the details of IGST paid of ₹ 17,30,468/-. This was rectified eventually and the same had been disclosed in the return itself. 2.5 The refunds were stuck due to mismatch of invoice and shipping bills and Central Board of Excise Customs (CBEC) vide Circular No.05 of 2018-Customs dated 23.02.2018 provided an alternative mechanism to give exporters an opportunity to rectify such errors committed in the initial stage. It envisaged an officer interface on the Customs EDI System through which the Custom Officer may verify the information furnished in GSTN and Custom EDI system and sanction refund in those cases where detail of invoice pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no question of withholding the refund amount as the claim is non-est. The petitioner is not related to the withholding of the refund, but for the relinquishment of the refund. 3.2 According to the respondents, the sole objective of the circular was to clarify that there was no justification for reopening once, the voluntary option of choosing between the higher rate of duty drawback or IGST refund is availed by the exporter. In other words, once the exporter had made a conscious decision of claiming higher rate of drawback, the rights and liabilities under the shipping bills shall be treated accordingly and they cannot be permitted to change on the basis of judgment of the Amit Cotton Industries vs. Principal Commissioner of Customs, reported in (2019) 107 taxmann.com 167 (Guj.) decided in favour of the exports. According to the respondents, the department had preferred an SLP Diary No.5502 of 2021 and on the technical ground of delay in filing SLP, no order on merit has been issued, therefore, the request is made to dismiss this petition in limine. 4. This Court has heard at length the learned advocate, Mr.Hiren Trivedi and learned senior standing counsel, Mr.Priya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaking, 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. 21. Section 54 of the CGST Act, 2017, reads thus: 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 in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. (2) A specialised agency of the United Nations Organisation or any Multila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under subsection (5) for final settlement of the refund claim after due verification of documents furnished by the applicant. (7) The proper officer shall issue the order under subsection (5) within sixty days from the date of receipt of application complete in all respects. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39. (14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Explanation.-For the purposes of this se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 96 of the CGST Rules, 2017, reads thus: 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 the relevant export invoices in respect of export of goods contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India. Provided that where the date for furnishing the details of outward supplies in FORM GSTR-1 for a tax period has been extended in exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305 (E), dated the 18th October, 2017 or notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E), dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate), dated the 23rd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance of the department is that, as the writ-applicant had availed higher duty drawback and as there is no provision for accepting the refund of such higher duty drawback, the writ-applicant is not entitled to seek the refund of the IGST paid in connection with the goods exported, i.e. 'zero rated supplies'. 28. If the claim of the writ-applicant is to be rejected only on the basis of the circular issued by the Government of India dated 9th October 2018 referred to above, then we are afraid the submission canvassed on behalf of the respondents should fail as the same is not sustainable in law. 29. We are not impressed by the stance of the respondents that although the writ-applicant might have returned the differential drawback amount, yet as there is no option available in the system to consider the claim, the writ-applicant is not entitled to the refund of the IGST. First, the circular upon which reliance has been placed, in our opinion, cannot be said to have any legal force. The circular cannot run contrary to the statutory rules, more particularly, Rule 96 referred to above. 30.Rule 96 is relevant for two purposes. The shipping bill that the exporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent authority is required to sanction the refund of IGST paid in regard to the goods exported i.e. zero rated supplies made vide these three Shipping Bills No.8465051, 8459617 and 8455069 dated 05.09.2017, 05.09.2017 and 14.09.2017 respectively. 5. This brings us to the issue of the interest stuck at 9% claimed by the petitioner. We notice that in both the decisions of Amit Cotton Industries (supra) and that of Awadkrupa Plastomech Pvt.Ltd (supra), the Court has passed the following order without discussing the issue on the interest. 11. In the result, this petition succeeds and is hereby allowed. The respondents are directed to immediately sanction the refund towards the IGST paid in respect to the goods exported i.e. Zero Rated Supplies made vide the shipping bills. It appears that the writ=applicant has also prayed to pay interest at the rate of 9% on the amount of refund from the date of shipping bill till the date on which the amount is actually paid. We may only say that if the refund of the principal amount is not sanctioned and actually paid to the writ-applicant within the period of six weeks from the date of receipt of this order, then inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court as well as various High Courts and this Court have disapproved such conduct/act on the part of the lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Still it appears that message has not reached the concerned authorities. In the recent decision in the case of Claris Lifesciences Ltd. (supra) in para 26 this Court has observed as under: 26.Despite such clear and specific directions and authoritative pronouncements, act of issuance of show cause notice by the Deputy Commissioner is wholly impermissible and unpalatable and deserves to be quashed and struck down with a specific note of strong disapproval. The respondents simply could not have exercised the powers contained under the statute in such arbitrary exercise and in complete disregard to the pronouncement of this Court particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier petition of this very petitioner. Resultantly, petition stands allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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