The Delhi High Court held that the assertions cannot be verified in absence of documents like shipping bills for which Goods and Service Tax (GST) refund is claimed.
The petitioners, M/S. UPS Inverter.com is the exporter of inverters, transformers, and allied products. In the course of their business, between the transitional period between the pre and post GST Regime, they had made various exports falling under Tariff Item 8504 of the Notification No. 13/2016-Cus.(N.T.), dated 31.10.2016 (as amended by Notification No. 41/2017-Cus.(N.T.) dated 26.04.2017) (Drawback Schedule) on the payment of Integrated Goods of Services Tax (IGST). The Drawback Schedule prescribed identical rates of Duty Drawback under Column ‘A’ as well as Column ‘B’ for the said Tariff Order.
Since there were no guidelines from the GST or Customs department in respect of procedure to be followed in such cases, the petitioners had claimed drawback under Column ‘A’ instead of under Column ‘B’. By Circular No. 37/2018-Customs dated 09.10.2018, the respondents have denied the refund of IGST on the ground that the exporters having filed the declarations voluntarily are deemed to have consciously relinquished their IGST/ITS claims.
Ms.Sakshi Singhal, counsel for the petitioners states that the issue raised in the present petition is squarely covered by the judgment of Delhi High Court in TMA International Pvt. Ltd. & Ors.. vs. Union of India & Anr. wherein it was held that if the petitioners have claimed and received only the customs duty portion of the drawback and element of IGST (earlier Central Excise Duty and Service Tax) was not included in the drawback rate, granting of IGST refund would not result in double neutralization of input taxes. Respondents have also, in fact, never intended to deny a refund of IGST paid on export in cases where only custom components were claimed as drawbacks.
On the other hand, counsel for the respondents submitted that the present petition does not implement the jurisdictional authority who has to verify the claim of the petitioners. He further submits that the petitioners have also not enclosed the relevant documents in the form of shipping bills for which the refund is claimed. He submits that in absence of these documents, the assertions made by the petitioners cannot be verified.
The division bench of Justice Manmohan and Justice Navin Chawla directed the respondent’s authority to carry out a verification exercise of the claim made by the petitioners within 12 weeks from today and submit a report to this Court. The petitioners shall be at liberty to file the relevant documents as may be called for by the jurisdictional authority in support of its claim. In case the respondents find the claim of the petitioners to be correct, the refund shall be processed by the respondents without awaiting further orders from this Court in accordance with the law.
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