Case Summary
Case Title: Tata Steel Ltd. v. State of Jharkhand & Ors.
Court: High Court of Jharkhand, Ranchi
Petition No.: W.P. (T) No. 2900 of 2024
Judgment Date: 03.04.2025 (CAV on 03.03.2025)
Category: Refund of Input Tax Credit (Compensation Cess)
Relevant Sections:
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Section 8(2), GST (Compensation to States) Act, 2017
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Section 56, CGST Act, 2017
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Rule 89(2)(b) & (c), CGST Rules, 2017
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Section 11(2), Compensation Cess Act
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Rule 96A(3), CGST Rules
Facts (Para 2–3)
The petitioner, Tata Steel Ltd., manufactures steel and sponge iron using coal as raw material, on which it paid Compensation Cess and availed ITC. Since goods were exported under LUT without payment of tax, accumulated ITC of Cess remained unutilized. For FY 2021–22, the petitioner applied for refund of ₹1.23 crore. However, the Deputy Commissioner rejected the refund (15.05.2023; Form RFD-06 dated 16.05.2023) citing non-submission of documents, and the appeal (25.10.2023) also failed. The petitioner approached the High Court contending that refund was rejected on grounds not envisaged under law.
Questions before the Court
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Whether refund of accumulated ITC of Compensation Cess on exports under LUT could be denied on grounds beyond the Act/Rules?
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Whether insistence on documents like proof of foreign remittance, non-prosecution declaration, and undertakings not mandated in law was sustainable?
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Whether refund rejection can be sustained when based on non-existent conditions despite binding CBIC circulars?
Observations (Para 5–9)
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On proof of receipt of payment within 180 days: Court held such requirement applies only to export of services, not goods. CBIC Circular 2019 (para 48) clarified that realization of export proceeds should not be insisted upon. (Para 5)
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On proof of export within 90 days: Reconciliation of invoices with EGM was provided. Even otherwise, Rule 96A(3) provides for recovery if export not done, but refund cannot be denied outright. CBIC Circular 2019 (para 45) and 2023 Circular (para 4.6) allow refund if goods are eventually exported. (Para 6)
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On non-prosecution declaration: No such statutory requirement exists. Circular (para 46 of 2019) clarifies self-declaration is not needed for every refund. (Para 7)
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On undertaking under Section 11(2) of Cess Act: Proviso applies only when supplies are made on payment of IGST, not exports under LUT. Hence irrelevant. (Para 8)
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On statement under Para 43(c) of 2019 Circular: Applies only in cases of ITC reversal. Petitioner already furnished a CA certificate confirming no unjust enrichment. (Para 9)
Judgment (Para 10–11)
The Court found all five grounds for rejection extraneous, contrary to law, and against binding circulars. Accordingly:
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Refund rejection order (15.05.2023; RFD-06 dated 16.05.2023) and appellate order (25.10.2023) were quashed.
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Respondents directed to refund ₹1,23,22,617 with interest under Section 56, CGST Act, within 12 weeks.
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Writ petition allowed, no costs.
Table of Cases Referred
| Case / Circular / Rule | Court / Authority | Verdict / Principle |
|---|---|---|
| CBIC Circular 37/11/2018 & 2019 Clarifications (para 45, 46, 48) | CBIC | Proof of realization not needed for goods; unnecessary declarations should not be insisted |
| CBIC Circular (2023) para 4.6 | CBIC | Refund allowed even if export beyond Rule 96A timeframe, provided export is completed |
| Rule 89(2)(b), (c), CGST Rules | Statutory | Payment proof required only for services, not goods |
| Rule 96A(3), CGST Rules | Statutory | Non-export within time leads to recovery, not denial of refund |
Between Fine Lines (Practical Takeaway)
This ruling reinforces that refund of accumulated ITC on exports cannot be denied on conditions not grounded in the GST law. Authorities must adhere strictly to the statute and CBIC circulars. For exporters, this ensures that refunds of Compensation Cess or ITC cannot be blocked merely for want of extraneous documents like proof of foreign remittance or redundant declarations, so long as exports are completed and CA certification is provided.
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