9911796707
TMI Blog2025 (1) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. 3 vide his order dated 11th August 2021. 4. The brief facts of the present case are that the Petitioner is a partnership firm registered under the GST Law and having its principal place of business within the jurisdiction of Mumbai in the State of Maharashtra. It is inter alia engaged in the business of exporting beverages out of India. The Petitioner had purchased the said beverages from local manufacturers. The supply of certain beverages at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledgment 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 cause notice, the Petitioner filed a detailed reply and specifically pointed out Circular No. 1/1/2017 dated 26th July 2017 issued by the Government of India, Ministry of Finance, Department of Revenue (Tax Research Unit). Before Respondent No. 3, the Petitioner submitted that the Compensation Cess had to be given the same treatment as tax under any other head and accordingly refund should be granted to the Petitioner. This argument of the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Services Tax Act; d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy;" 10. It appears that Respondent No. 2 has got confused by equating composition Levy with Compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Compensation Cess. Of course, it is needless to state that the Input Tax Credit taken for Compensation Cess can be allowed for utilization of Input Tax Credit of Cess only for payment of Cess on the outward supplies, and not any other tax. Paragraph 42 of the Circular dated 18th November 2019 reads thus:- "42. Doubts have been raised whether a registered person is eligible to claim refund of unutilized input tax credit of compensation cess paid on inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relevant portion of the Circular dated 26th July 2017 merely states that there is no provision for refund of Input Tax Credit other than those defined and included under Section 2 (62) and Section 2 (63) of the CGST Act, which does not include Compensation Cess. We are of the opinion that this finding, and which is the only finding on which the refund is rejected, is wholly unsustainable in light of the clarifications issued by the aforesaid two Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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