Denial of benefit of Area-based Exemption under excise-regime no reason to restrict 'Budgetary-Support'

The Delhi HC in Special Cables Pvt. Ltd.1, held that the 'budgetary-support' benefit under the Scheme of Budgetary Support under Goods and Services Tax Regime to units located in the State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim ("Scheme") cannot be denied to an eligible unit merely because such unit was denied the benefit of 'Area-based Exemption' under Notification No.50/2003-CE dated 10.06.2003 ("Notification").

The Bench observed that Para 4.1 of the Scheme sets out two conditions for a unit to qualify as an 'eligible unit' – (a) It was eligible to avail the benefit of central excise exemption, under the Notification mentioned in Para 2 of the Scheme, before 01st July, 2017; and (b) It was availing such exemption immediately before 01st July, 2017. The Bench also observed that the orders given by learned Commissioner (Appeals) and learned CESTAT indicate that Petitioner fulfils the first condition.

Furthermore, the Bench held that the benefit denied under the Notification cannot be construed as benefit not availed. Therefore, the Petitioner also fulfils the second condition and is an eligible unit for the benefit of 'budgetary-support' under the Scheme.

Customs Authority, not CGST department, a proper authority to take up IGST refund scrutiny proceedings

The Gujarat HC in Mobile Shoppe vs. UOI2, held that Assessee becomes entitled to the refund of the Integrated Goods & Services Tax ("IGST") paid when the export has been permitted by the Customs Authority.

The Court observed that Rule 96 of the Central Goods and Services Tax Rules, 2017 ("CGST Rules") very clearly indicates that the shipping bill of the export is to be treated as the refund application for the IGST paid on the export, given that Customs Authority has permitted the goods to be exported and Assessee has paid the IGST on export.

The Court further held that any issue with respect to the export of goods is only for the Customs Authority to observe, therefore, permission of the Customs Authority to export the goods will entitle the Assessee to the refund of IGST paid on such export.

Verification of supplier's supplier not mandated under any provision of GST law

The Gujarat HC in Choksi Exports vs. UOI3, directed the Revenue Department to refund the IGST amount, which was withheld on account of wrongful claim of Input Tax Credit ("ITC") as the Petitioner's supplier's supplier qualified as a 'risky supplier'.

The Court observed that under Section 54(6) of the Central Goods and Services Tax Act, 2017 ("CGST Act") and Rule 91(1) of the CGST Rules, 2017, the respondents were bound to refund 90% of the amount within seven days of the acknowledgement of shipping bills, provided the Petitioner has, during the last five years, not been prosecuted for any offence under any law in force in India.

Furthermore, the Court observed that none of the provisions of the CGST Act or IGST Act mandate the verification of the genuineness of the supplier's supplier, even though safeguards are provided to recover taxes (if not paid or wrongly availed), and as the Petitioner has already reversed the ITC claimed, there is no reason for the Revenue Department to withhold the IGST refund.

Written request for refund of EDD not a fresh application when earlier proceedings related to refund application exist

The Delhi HC in Sentec India Company Pvt. Ltd. vs. Asst. Commissioner of Customs & Anr.4, while setting aside the order of Assistant Commissioner rejecting Assessee's request for refund of Extra Duty Deposit ("EDD"), held that the Assessee is entitled to the refund of EDD deposited during the Special Valuation Branch ("SVB") under the Customs Valuation (Determination of Valuation of Imported Goods) Rules, 2007.

The Court observed that the written request for refund of EDD was subsequent to Commissioner (Appeals) order and was not a fresh application under Section 27 of Customs Act, 1964. Therefore, the written request was in continuation of the earlier proceedings relating to the application of refund.


1. TS-27-HC(DEL)-2023-GST

2. TS-24-HC(GUJ)-2023-GST

3. TS-30-HC(GUJ)-2023-GST

4. TS-48-HC-2023(DEL)-CUST

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