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TMI Blog2021 (12) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on such tax or any other amount paid by him shall make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. 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/48-865/EXP/AMD/ MP SEZ/17-18 dated 22.09.2017. It is not in dispute that the Demand Draft of differential drawback aggregating to an amount of ₹ 3,71,236/- 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. In the case of M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS [ 2019 (7) TMI 472 - GUJARAT HIGH COURT] it was held that the writ-applicant is entitled to claim the refund of the IGST and 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 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the goods exported i.e. at Zero Rated Supplies . Akin provisions in form of Section 56 of the CGST Act, 2017, is incorporated, which deals with the interest on delayed refund. On perusal of Section 56 of the CGST Act, it is explicitly made clear that if the applicant is not refunded the tax amount within 60 days from the date of receipt of the application under Sub-Section 1 of Section 54 then interest at such rate not exceeding 6% as may be specified in the Notification, which may be issued by the Government is payable in respect of such refund from the date immediately after expiry of 60 days from the date of receipt of such application till refund amount is received. The records reveals that the petitioners have raised the refund of IGST immediately within prescribed time and had also 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. 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the petitioners that inadvertently, the petitioner s Company had claimed drawback at higher rate by punching option 1201A instead of claiming drawback at lower rate by punching option 1201B , while generating shipping bills. It is mainly contended that by mistake, it had claimed due drawback @ 1% (higher rate) by punching option 1201A instead of claiming the same at 0.15% only (lower rate) by punching option 1201B . It is further claimed by the petitioner that due drawback @ 1% towards all six shipping bills was for an amount of ₹ 4,36,748/-. The differential drawback @ 0.85% towards all six shipping bills was around ₹ 3,71,236/-. In such circumstances, the drawback at lower rate (0.15%) of ₹ 65,512/- was retained in respect of aforesaid six shipping bills and rest of the differential drawback amount was returned back by Demand Draft No.049160 dated 28.8.2019 which was deposited by the Customs Department for which separate Challan acknowledging the receipt of differential amount has been issued by the respondents. The petitioners further claimed that IGST aggregating to an amount of ₹ 12,00,800/- against three shipping bills was paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7867436 07.08.17 131484-2017-11-1 MSCUUD683373 5. It is further contended by the learned advocate for the petitioner that the goods supplied by the registered person were neither NIL rated goods or exempt supplies. The said supplies are affected by the payment of IGST in accordance with the provisions contained in Section 16(3)(b) of the IGST Act. According to the said provision, a registered person making Zero Rated Supply has an option to claim refund in accordance with Section 16(3)(b) of the Act or as he may supply goods or service or both on payment of integrated tax and can claim refund of such tax paid on the goods or services or both supplied as per Section 54 of the Central Goods and Service Tax Act, 2017. The attention of this Court was also drawn to Rule 96 of the CGST Rules, 2017 and it was further contended that shipping bills 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment 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 Deputy Commissioner of Customs, on behalf of the respondent Nos.2 to 5 herein. The respondent Authorities ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST as well as IGST Rules, 2017. Before adverting to the issue involved, it would be appropriate to have glance at the relevant provisions of Sections 16 of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies. (4) The application shall be accompanied by- (a) such documentary evidence as may be prescribed to establish that a refund is due to the applicant; and (b) such 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) No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority by the specified date, the proper officer may- (a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional Commissioner of central tax, State tax or Union territory tax, as the case may be, and a copy of such intimation shall be transmitted to the common portal. (6) Upon transmission of the intimation under sub-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 claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. So far as Rule 96 of the CGST Rules, 2017 is concerned, the same raises a deeming fiction inasmuch as the shipping bills, which are submitted by the exporter of the goods are deemed to be treated as an application for refund of 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/48-865/EXP/AMD/ MP SEZ/17-18 dated 22.09.2017. It is not in dispute that the Demand Draft of differential drawback aggregating to an amount of ₹ 3,71,236/- 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 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 provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 07.03.1994 was valid between 1st April, 1994 up to 31st March, 1997 (upto 31st March, 1997 vide notification dated 12.03.1997) and not thereafter.The Commercial Tax Department, by a circular, could have extended the benefit under a notification 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant 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 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 refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund from the date immediately after expiry of 60 days from the date of receipt of such application till refund amount is received. The records reveals that the petitioners have raised the refund of IGST immediately within prescribed time and had also 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 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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