Page 123 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] TMA INTERNATIONAL PVT. LTD. v. UNION OF INDIA 25
refund was not denied and it was in fact assured to them that the refund would
be received by them in due course of time. However, despite repeated communi-
cation in the form of letters and mails written by the Petitioners to the Custom
Departments of various State agencies, no action was taken. On the contrary, on
9-10-2018, Respondent No. 2 issued the Circular No. 37/2018 (hereinafter the
“impugned circular”), whereafter the Petitioners have been held disentitled to
claim refund of the IGST. The relevant portion of the said circular reads as
under :
“3. It has been noted that exporters had availed the option to take draw-
back at higher rate in place of IGST refund out of their own volition. Con-
sidering the fact that exporters have made aforesaid declaration while
claiming the higher rate of drawback, it has been decided that it would not
be justified allowing exporters to avail IGST refund after initially claiming
the benefit of higher drawback. There is no justification for reopening the
issue at this stage.”
As per the impugned circular since the Petitioners had availed higher drawback
rates under Column A, they were held not entitled to seek refund of IGST, to
avoid multiplicity of refund.
7. Petitioners have thus challenged the aforesaid circular on the ground
that impugned notification are without authority of law as none of the conditions
for withholding refund of IGST, prescribed under Section 16 of the IGST Act read
with Rule 96(4) of the CGST Rules, are satisfied in the present case. Mr. Samar
Bansal Learned Counsel for the Petitioners contends that the withholding of re-
fund, as directed in the impugned notification, could only have been made pur-
suant to the alteration in rules on recommendation of the Council. He submits
that as per Section 2(87) of the CGST Act read with Section 2(24) of the IGST Act,
“prescribed” means rules made in accordance with the recommendations of the
Council. Therefore, on a reading of Section 16(3)(b) of the IGST Act and Section
54(1) of the CGST Act, the procedure and rules for claiming refund of IGST can
be modified or altered only on the recommendation of the Council. Lastly, he
contends that since the drawback rates in Column A and Column B were identi-
cal for the goods exported by the Petitioners, hence no additional benefit has ac-
crued to the Petitioners owing to the higher drawback rates as claimed by Re-
spondent No. 2 in the impugned notification. In support of this contention, Peti-
tioners have relied upon Paragraph 7 of the Notes and Conditions of the Draw-
back Notification which indicates that if the duty drawback rates mentioned in
Column A and Column B are identical, then the drawback allowable refers only
to the Customs component and did not include Central Excise and Service Tax
component, irrespective of whether the drawback was claimed under Column A
or Column B. The said para reads as under :
“The figures shown in the said Schedule in column (4) and (5) refer to the
total drawback (Customs, Central Excise and Service Tax component put
together) allowable and those appearing in column (6) and (7) refer to the
drawback allowable under the Customs component. The difference in rates
between the columns (4) and (6) refers to the Central Excise and Service tax
component of drawback. If the rate indicated is the same in the column (4)
and (6), it shall mean that the same pertains to only Customs component
and is available irrespective of whether the exporter has availed of Cenvat
facility or not”
GST LAW TIMES  2nd April 2020  187