9911796707
TMI Blog2025 (1) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... is leviable under Section 8 of the Compensation Cess Act. This apart, according to Respondent No. 2, since Compensation Cess is not specifically mentioned in the definition of input tax , the same has been denied to the Petitioner. This issue is squarely covered by two Circulars. The first Circular is dated 26th July 2017. In paragraph 8 of this Circular, it is made clear that the Exporter will be eligible for refund of Compensation Cess paid on goods exported by him (on similar lines as refund of IGST under Section 16 (3) (b) of the IGST Act). This has been further made clear by a subsequent circular of the Central Board of Indirect Taxes and Customs dated 18th November 2019. Once again, by this Circular, in paragraph 42, it is made clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul C. Thakar, with Mr. C. B. Thakar, Advocates. For the Respondent Nos.1 to 3: Mr. Siddharth Chandrashekhar, with Mr. Saket R. Ketkar, Advocates. P.C. 1. Rule. Respondents waive service. With the consent of parties, Rule made returnable forthwith and heard finally. 2. The short question raised in the above Writ Petition is whether the Petitioner is entitled to a refund of Input Tax Credit (ITC) for compensation cess leviable under Section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 (for short "the Compensation Cess Act"). 3. By the order impugned in the present Writ Petition, Respondent No. 2, by the impugned order in Appeal dated 23rd February 2022, upheld the rejection of the refund passed by Respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of the accumulated input tax credit for the period of April 2021 vide RFD-01 dated 11th June 2021. The said application was filed under Rule 89 of the CGST Rules claiming the refund of the accumulated ITC on account of zero rated supply made under LUT. The computation of refund was as follows:- Heading CGST SGST Compensation Cess Total Amount 10,72,304 10,72,304 9,06,854 30,51,462 7. Respondent No. 3 thereafter issued acknowledgment of the refund in RFD-02 on 13th July 2021. On the said refund application, Respondent No. 3 issued a show cause notice in RFD-08 calling upon the Petitioner to show cause as to why the refund of Rs. 9,06,854/- (under the head of C0mpensation Cess) should not be disallowed. To this show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard the learned counsel for the parties, we find that the rejection of the refund is wholly unsustainable in law. The definition of the words "input tax" in Section 2 (62) of the CGST Act reads as under:- "Input Tax is defined under Section 2 (62) of the CGST Act, 2017 as under:- "input tax" in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includesa) the integrated goods and services tax charged on import of goods; b) The tax payable under the provisions of sub-sections (3) and (4) of section 9; c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on goods exported by him [on similar lines as refund of IGST under section 16 (3) (b) of the IGST Act, 2017]; or b) No Compensation Cess will be charged on goods exported by an exporter under bond and he will be eligible for refund of input tax credit of Compensation Cess relating to goods exported [on similar lines as refund of input taxes under section 16 (3) (a) of the IGST, 2017]." (emphasis supplied) 12. This has been further made clear by a subsequent circular of the Central Board of Indirect Taxes and Customs dated 18th November 2019. Once again, by this Circular, in paragraph 42, it is made clear that a registered person making a zero rated supply under LUT may claim refund of unutilized credit including that of Compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including that of compensation cess paid on coal. Such registered persons may also make zero-rated supply of aluminium products on payment of Integrated tax but they cannot utilize the credit of the compensation cess paid on coal for payment of Integrated tax in view of the proviso to section 11 (2) of the Cess Act, which allows the utilization of the input tax credit of cess, only for the payment of cess on the outward supplies." (emphasis supplied) 13. From these Circulars, it is absolutely clear that the Petitioner is entitled to a refund even of Compensation Cess. These Circulars have been glossed over by the Additional Commissioner in the impugned order. The Additional Commissioner (Respondent No. 2), after setting out the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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