9911796707
TMI Blog2024 (7) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... und of input tax credit availed and utilized in discharging IGST on the exported goods. It is however subjected to rider or limitation under Rule 96(10) of the CGST Rules, 2017. The petitioner is perhaps entitled to exemption under Rule 89 of the CGST Rules, 2017, as the petitioner has received inputs under CBEC N/N. 48/2017-Central Tax, dated 18.10.2017 and under N/N. 78/2017-Cus (Tariff) dated 13.10.2017 amending N/N. 52/2003-Cus (Tariff) dated 31.03.2003 - the procedural irregularity committed by the petitioner should not come in the legitimate way of grant of export incentives as admittedly exports were made and the refund claims were itself based on the shipping bills. The Court has repeatedly held that procedural irregularity should come in the legitimate way of grant of export incentives - reliance placed on the decision of the Hon'ble Supreme Court in COMMISSIONER OF SALES TAX, U.P. VERSUS AURIAYA CHAMBER OF COMMERCE, ALLAHABAD [ 1986 (4) TMI 363 - SUPREME COURT ], wherein, it has been held that the rules or procedures are hand-maids of justice not its mistress. The impugned order is set aside and the case is remitted back to the fifth respondent to pass fresh order by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to which the refund can be claimed. Thus, in case if any exporter choses the option under Section 16(3)(b) as above, the conditions, safeguards and procedures prescribed thereon have to be adhered to, which, in this case, are provided for under Rule 96(10) of the CGST Rules, 2017. From the provisions of Section 16 of IGST Act, 2017, it is clearly seen that the benefit of refund of IGST paid goods or services supplied is restricted to the case of making zero rated supplies. Rule 96(10) was inserted under the powers conferred under Section 164 of CGST Act, 2017 in order to prevent exporters from availing double benefits of duty free / concessional procurement of inputs by availing the benefit under the relevant notification and of refund of IGST paid on exports as it will tantamount to monetization of Input Tax Credit which is attributable towards the non-export supplies. Thus, Rule 96(10) of the CGST Rules, 2017 seeks to prevent an exporter who is receiving the goods (inputs) availing the benefit of certain notifications under which they supply goods without payment of tax or reduced rate of tax, from exporting their final products on payment of integrated tax by way of utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017. Therefore, I find that the Section 16(3) of the IGST Act, 2017 extended authority for refund of tax paid on the goods / services, the same section also ensured that such claims are not absolute and they would be subject to such conditions, safeguards and procedures as may be prescribed. Section 16 of the IGST Act, 2017 does not offer carte blanche for claim of refund and it only provides for allowing such claims of legitimate refunds which are not contrary to or out of the ambit of larger limitations of law created by imposition of restrictions. 29. In their reply to the Show Cause Notice, the Noticee have stated that they have also procured inputs, input services and capital goods on payment of tax and availed Input Tax Credit and hence they are having huge accumulated credit in their electronic ledger. They have further stated that major portion of the above credit is related to zero rated supply and such ITC must be granted as refund in terms of Section 54 of the CGST Act, 2017 read with Section 16 of the IGST Act, 2017. In the present case, the Noticee have opted to pay IGST on export goods by availing the ITC and to claim of refund of such IGST paid on export goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opted to pay IGST on export goods by availing the ITC and claim refund of such IGST paid, under Rule 96 of the IGST Rules, 2017. The applicability of refund under Rule 89(4B) of CGST Rules, 2017 is subject to the terms and conditions and procedures stipulated thereunder. The present Show Cause Notice is limited to the aspect as to whether the refund of IGST paid on export goods is eligible or not in terms of provisions of Section 16(3) of the IGST Act, 2017 read with Rule 96(10) of the CGST Rules, 2017. Thus, the issue raised by the Noticee as above is clearly out of the scope of present proceedings and as such, any discussion on the same will clearly be tantamount to travelling beyond the scope of the Show Cause Notice. 32. In their letter dated 21.02.2022, the Noticee have cited the decision of the Hon'ble High Court of Delhi in the case of Pitambra Books Private Ltd. Vs. Uol reported in 2020 (34) GSTL 196 (Del) to claim that the substantive benefits available to the exporter under Rule 89 is to be determined and extended to them. The above case relates to refund application filed under Rule 89 of CGST Rules, 2017 and the applicability of the procedures stipulated thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch aet had contravened the provisions of Rule 96(10) of the CGST Act, 2017 and the refund of IGST claimed to the tune of Rs. 22,50,53,102/- (Rupees Twenty Two Crore Fifty Lakh Fifty Three Thousand One Hundred and Two only) (IGST: Rs. 22,50,53,102/-) during the period from January, 2019 to September, 2020 is liable to be recovered from them along with applicable interest. 35. In the subject Show Cause Notice, the ineligible refund of IGST availed by the Noticee is sought to be recovered under the provisions of Section 74 of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017, by invoking the extended period of limitation. The Noticee have claimed that extended period of limitation cannot be applied to the present case for the reasons that all the details are reflected in the GST Returns and that no information was deliberately withheld with an intent to evade and no allegation of fraud or wilful mis-statement or suppression of facts to evade tax has been made in the Show Cause Notice. The provisions of Section 16(3) of the IGST Act, 2017 and Rule 96(10) of CGST Rules, 2017 are straight and simple and leave nothing for any interpretation. In terms of Rule 96(10) of CGST Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in paying IGST on export goods utilizing the ITC and availing refund of the same tantamount to suppression of fact for getting refund of IGST which is ineligible. The wrong and deliberate payment of IGST on exports and availing refund of the same in spite of having availed exemption on procurement of inputs, has been brought to light only after the department called for the relevant details from the taxpayer. Thus, I find it is a clear case where the refund of IGST has been availed in a method which tantamount to misstatement of facts and as such, the amount of IGST which has been erroneously refunded is liable to be recovered from the taxpayer under Section 74 of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017 along with the corresponding provisions of SGST Act, by invoking the extended period of limitation, along with appropriate interest under the provisions of Section 50 of the CGST Act 2017 read with the Section 20 of the IGST Act, 2017, along with the corresponding provisions of the SGST Act. For the same reasons, I find that the Noticee have rendered themselves liable to penalty under Section 122(2)(b) of the CGST Act, 2017. 3. The case of the petitioner is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in Rule 96 and the same is accepted. As per the amendments, disputed refund claims under Rule 96 are to be disposed of under Rule 89 by the Jurisdictional Assistant /Deputy Commissioner. It is a fact that as per the Circular CBEC- 20/08/02/2020-GST/1377-78 dated 28.11.2022, the Jurisdictional Assistant /Deputy Commissioner has to complete the assessment as per Rule 89(4) of the CGST Rule, 2017. 11. Hence, it is humbly prayed that this Hon'ble High Court may be pleased to dismiss this present writ petition with a direction to prefer an appeal before the competent authority or pass such order as deemed fit. Alternatively, it is prayed that if this Hon'ble High Court considers the plea of the petitioner needs legal remedy then a judicial decision as to whether the Jurisdictional Assistant /Deputy Commissioner could re-process and complete the refund claim of the petitioner under Rule 89 of CGST Rule, 2017 may kindly be issued as deemed fit by this Hon'ble High Court.'' 9. I have considered the submissions made by the learned counsel for the petitioner and the learned Central Government Standing Counsel for the first respondent and the learned Senior Standing Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003. 12. I am of the view, the procedural irregularity committed by the petitioner should not come in the legitimate way of grant of export incentives as admittedly exports were made and the refund claims were itself based on the shipping bills. 13. The Court has repeatedly held that procedural irregularity should come in the legitimate way of grant of export incentives. In this connection, I would like to place reliance on the decision of the Hon'ble Supreme Court in Commissioner of Sales Tax, Uttar Pradesh Vs. Auriaya Chamber of Commerce, Allahabad , 1986 (3) SCC 50 : (1986) 25 ELT 867, wherein, it has been held that the rules or procedures are hand-maids of justice not its mistress. Relevant paragraph reads as under:- 29. It is true that except special provisions indicated before, there is no specific provision which prescribes a procedure for applying for refund in such a case. But the rules or procedures are handmaids of justice not its mistress. It is apparent in the scheme of the Act that sales tax is leviable only on valid transaction. If excess amount is realised, refund is also contemplated by the scheme of the Act. In this case undoubtedly sales tax on forward contra ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
