Legal principle

Where the All Industry Rate of duty drawback is identical under both the CENVAT-availed and CENVAT-not-availed columns of the drawback schedule, the exporter has not claimed a 'higher rate of drawback', and mere claim of such drawback cannot justify denial of IGST/input tax credit refund on zero-rated exports under Section 16(3) IGST Act r/w Section 54 CGST Act.

Court decision

The writ petition was allowed in favour of the petitioner: the respondents were directed to scrutinize the refund claims under Section 16(3) IGST Act r/w Section 54 CGST Act and Rule 89 CGST Rules and refund the amounts with applicable interest under the respective enactments within three months; no costs.

Facts

Numinous Impex (I) Pvt. Ltd. exported consignments classifiable under Customs Heading 8483-40-00 (one shipping bill under serial 8413A) under four shipping bills dated 29.07.2017 to 20.09.2017, made without payment of IGST (under bond), and claimed duty drawback at 2% under Section 75 of the Customs Act, 1962 read with Notification No.131/2016-Cus (N.T.) as amended by Notification No.73/2017-Cus (N.T.), plus refund of input tax credit on inputs used in the exports totaling Rs.18,18,584. The Customs authorities at Tuticorin did not settle the IGST refunds, contending that by claiming drawback under serial code A the petitioner was deemed to have availed the higher drawback rate and had consequently relinquished its IGST/ITC claims, and that the drawback/IGST refund process is fully automated with no manual intervention possible. The petitioner filed a writ petition under Article 226 seeking a mandamus to pay the pending refunds with interest.

Key provisions

• Section 75, Customs Act, 1962 — Drawback on imported materials used in the manufacture of goods which are exported
• Section 16(3)(a), The Integrated Goods and Services Tax Act, 2017 — Zero rated supply.