9911796707
TMI Blog2022 (2) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... That Your Lordships may be pleased to issue a Writ of Mandamus, or any other appropriate writ, order or direction. striking down Sub Rule (48) of Rule 89 of the CGST Rules, 2017 as ultra vires Sections 54 and 164 of the CGST Act, 2017: ultra vires Section 16 of the IGST Act, 2017 and ultra vires Articles 14 and 19(1)(g) of the Constitution of India: (B) That Your Lordships may be pleased to issue a Writ of Certiorari, or any other appropriate writ, order or direction, quashing and setting aside OIA No.VAD-CGST-02-APP-JC-OIO-2020-21 dated 13.7.2020 (Annexure-"O") passed by the Joint Commissioner, GST & Central Excise (Appeals) and also OIO No.5/Adj/Dem/JC/AK/2021-22 dated 19.7.2021 (Annexure-"U") passed by the Joint Commissioner, CGST & Central Excise, Vadodara-ll with all consequential reliefs and benefits to the Petitioner: (C) That Your Lordships may be pleased to issue a Writ of Mandamus, or any other appropriate writ, order or direction holding and declaring that the refund claims for unutilized ITC of input transactions attributable to Zero rated supply in the nature of exports under LUT lodged by the Petitioner under Rule 89(4) of the CGST Rules were legal and valid, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported goods was allowed by the Central Government and accordingly, the rebate of the Excise duty paid on the goods exported by the writ applicant - company was being regularly sanctioned and paid to the writ applicant - company by the department of the Central Excise. 10. From 1st July 2017, the new regime came into force i.e. the provisions of the CGST and IGST and CGST Rules for levy and recovery of the Goods and Services Tax came into force. 11. The writ applicant - company has been registered under the GST law and has been assigned a registration number. It is the case of the writ applicant - company that under Section 16 of the CGST Act, the Input Tax Credit (ITC) of the tax paid on input transaction is admissible to a registered person and in such circumstances, the writ applicant has been availing ITC of the GST paid on the inputs, capital goods and input services received under statutory documents like the tax invoice evidencing payment of the GST on such supplies. 12. According to the writ applicants, under the GST regime, the Government has provided a formula for arriving at the quantum of refund in respect of exports when a manufacturer exporter like the writ appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 40/2017, 41/2017, 78/2018 or 79/2017, would be available. As a matter of fact, formula remains same as laid down under sub rule (4) of Rule 89. Thus in any case refund is available in terms of the formula as mentioned in sub rule 4 of Rule 89. In view thereof, the noticee submits that they have filed refund claim correctly and legally under the provisions of Rule 89(4) and thereby it requires to be sanctioned." I find this contention to be incorrect as Rule 89 (4B)(b) is exclusively dealing with such situation i.e. Where the person claiming refund of unutilized input tax credit on account of zero rated supplies without payment of tax has availed the benefit of notification No. 78/2017-Customs, dated the 13th October, 2017 or notification No. 79/2017- Customs, dated the 13th October, 2017, and the refund of input tax credit, availed in respect of inputs received under the said notifications for export of goods and the input tax credit availed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted. 5.11 I find that the claimant has partially agreed at para 7.3, page 6, of their defence submissions, (mentioned in the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever their concluding that "In view thereof, it is submitted that the notices has filed refund claim correctly in terms of the provisions of Rule 89(4) of the CGST Rules, 2017", is legally not tenable as they are required to file refund under Rule 89 (4B) and that too under any other category, hence the applicability of formula does not arise and the claimant is entitled for refund as per the provisions of Rule 89 (4B) which is devoid of any formula under Rule 89(4) and speaks of "the refund of input tax credit, availed in respect of inputs received under the said notifications for Export of goods and the input tax credit wailed in respect of other inputs or input services to the Extent used in making such Expert of goods shall be granted, but shall be accompanied by all supporting documents required for substantiating the refund claim under the category "refund of unutilized ITC on account of exports without payment of tax. Here it is pertinent to mention that the claimant is free to file refund under 89 (4B) under "any other category", for the relevant period of this refund claim. 6 In view of the above, I pass the following order. ORDER 1. I hereby reject the refund claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed in respect of other inputs or input services to the extent used in making such export of goods, shall be granted." The refund is applicable on the accumulated ITC that have gone into the making of export of goods. Thus, it can be seen that under Rule 89(4B) no formula is applicable for calculating the refund of accumulated ITC. 5.6 From, the above discussion it can be seen that the appellant is eligible for refund of accumulated credit, not under Rule 89(4) of CGST Rules, 2017 as claimed but under Rule 89(4B) of CGST Rules, 2017. The appellant had filed the present refund claim under Rule 89(4), which has been rejected by the adjudicating authority as they have failed to file the refund claim under the correct Rule i.e. Rule 89(4B) and the claim requires to be amended and Refund has to filed under Rule 89(4B) as suggested in the impugned Order Para 5.12. Since this Office is not in possession of all the records and details of ITC credit availed and related matters the case is remanded back to the adjudicating authority with the mandate of considering the claim of refund of the ITC by the appellant afresh under Rule 89(4B) of the CGST Rules, 2017 and pass a Speaking Order ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take notice of the fact that the writ applicants have challenged the constitutional validity of Sub Rule (4B) of Rule 89 of the Rules, 2017 on the ground that the said Sub Rule is ultra vires Sections 54 and 164 respectively of the CGST Act; ultra vires Section 16 of the IGST Act, 2017 and ultra vires Articles 14 and 19(1)(g) of the Constitution of India. The second part of the relief as prayed for by the writ applicants is to quash and set aside both the orders passed by the authorities i.e. the order passed by the Assistant Commissioner and the order passed by the Joint Commissioner (Appeals) and the grant of refund accordingly. 24. We have heard Mr. Paresh M. Dave, the learned counsel appearing for the writ applicants and Mr. Utkarsh Sharma, the learned A.G.P. appearing for the respondents. 25. We first inquired with Mr. Dave as to why his clients want to challenge the constitutional validity of Sub Rule (4B) of Rule 89 of the Rules. We heard Mr. Dave on this issue and tried to understand his line of arguments. Manifold contentions were raised by Mr. Dave in this regard. However, we are of the view that at this point of time, we should not touch the issue as regards the consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods, the input output ratio i.e. exact quantities of raw materials / input supplies used in such export of goods and ought have the capacity to bifurcate the ITC availed on such input supplies used in such export of goods and hence the claimant's contention that they can't identify the input supplies used in exports exclusively as input supplies are common in both exports and DTA supply is not tenable and also not sustainable. Thus, emphasizing that they are unable to follow the procedure as prescribed under Rule 89(4B) is not possible to them, is totally baseless and not acceptable." 28. The stance of the Principal Commissioner is that it is not correct on the part of the writ applicants to say that if Sub Rule (4B) of Rule 89 is to be applied, then it is difficult for the writ applicants to establish the quantum of ITC availed in respect of inputs or input services to the extent used in exporting the goods. According to Mr. Dave, the Principal Commissioner, in its reply, has himself provided a workable formula. In such circumstances, according to Mr. Dave, there need not be any debate now whether the Sub Rule (4) or Sub Rule (4B) of Rule 89 would apply. In the reply, the Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 74(1) of CGST Act, 2017 read with Section 50 of CGST Act, 2017 as amended. (iii) I impose penalty of Rs. 85,37,07,928/- (Rupees Eighty Five Croes Thirty Seven Lakhs Seven Thousand Nine Hundred and Twenty Eight only) equal to the amount mentioned at (i) upon the claimant M/s. Filatex India Ltd. (GSTIN - 24AAACF0027B1ZM) and order to recover the same under Section 74(9) of CGST Act, 2017 as amended." 32. This writ application succeeds in part. The impugned order dated 19th July 2019 passed by the Joint Commissioner, CGST and Central Excise, Vadodara - II referred to above is hereby quashed and set aside. The Assistant Commissioner shall now proceed further in accordance with the directions issued by the Joint Commissioner (Appeals) vide the order dated 13th July 2020 and adjudicate the claim of the writ applicants in accordance with Sub Rule (4B) of Rule 89 of the CGST Rules, but keeping in mind the formula of input / output ratio of the inputs / raw materials used in the manufacturing of the exported goods. In other words, keeping in mind what has been stated by the Principal Commissioner in his affidavit-in-reply filed in the present litigation, more particularly, in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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