Authorities cannot withhold refund of IGST paid on exported goods for purpose of availing higher duty drawback where differential amount has been already remitted back.

Case Details:

Issue- In the above case, the petitioner’s principal grievance was the inaction of the respondent Authorities regarding refund of IGST towards Shipping Bills dated 5-7-2017 to 10-8-2017. The Company of Petitioner had claimed drawback at higher rate by punching option “5202A” and option “600699A” instead of claiming drawback at lower rate by punching option “5202B” and option “600699B”, while generating shipping bills. It is claimed by the petitioners that having realized the aforesaid mistake, vide letter dated 12-9-2017, had immediately requested the Deputy Commissioner of Customs (Export), Customs House, Mundra, to amend the aforesaid shipping bills in exercise of powers conferred under section 149 of the Customs Act, 1962 The request was also made to the effect of punching of “A” to be treated as punching of “B”. On 15-9-2017, the petitioner Company had submitted to the Deputy Commissioner of Customs (Exports), Customs House, Mundra to consider their case for IGST refund and had further disclosed their intention to not to claim higher drawback thereby showing their willingness to give back differential drawback amount. In furtherance thereof, the petitioner Company had drawn Demand Drafts bearing Nos.332754 and 332755, dated 17-10-2017 and Demand Draft No. 044281, dated 13-9-2017 for an aggregate amount of Rs. 3,39,245/- towards differential drawback amount with interest and the said Demand Drafts were realized by the Customs upon deposit of the same on 18-9-2017 and 23-10-2017 respectively but the refund was withheld by authority.

Held- It was held that the shipping bills have been amended pursuant to the decision of the Superintendent of Customs (Export) as reflected in communication bearing No. VIII/48-834/EXP/AMD/MP&SEZ/17-18 DATED 30-10-2017 and it is not in dispute that the Demand Draft of differential drawback aggregating to an amount of Rs. 3,39,245/- 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 with such issue in the similar set of facts of the case. So far as the issue with regard to the applicability of Circular dated 9-10-2018 read with Notification 31/2016 – Cus (N.T.) dated 31-10-2016 as amended by Notification 59/12 dated 29-6-2017 and Notification 73/2017-Customs (NT) dated 26-7-2017 are concerned, it would be apt to reproduce the observations made by the Hon’ble Apex Court in the case of CCE v. Ratan Meting & Wire Industries 2008 taxmann.com 1649. In the aforesaid decision, the Constitutional Bench of the Apex Court was considering the binding nature of a circular issued under the Central Excise act, 1944 which were contrary to decisions rendered by the Supreme Court. The Apex Court in the above case held that :— Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and S.R. JOSHI 16 of 18 wp-1266-2013 of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the Court. It is for the Court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.” n view of the aforesaid settled legal position, the present petition succeeds. We hereby direct the respondent Authorities to immediately sanction the refund towards IGST paid in respect of goods exported “Zero Rated Supplies” made under the shipping bill as referred hereinabove. n peculiar facts and circumstances of the case, we further direct respondent authorities to grant interest @ 9% from the date when the bills for refund of IGST were raised by the petitioner, till its actual payment. The amount of refund of IGST along with interest so determined shall be paid within a period of 8 (eight) weeks from the date of receipt of this order. In case the respondent Authorities fail to released such amount, then the petitioners shall be entitled for realization of further interest @ 9% till its actual payment.