Madras HC in the case of M/s.Chaizup Beverages LLP Versus The Assistant Commissioner
M/s.Chaizup Beverages LLP
The Assistant Commissioner
Facts of the Case:
These Writ Petitions challenge appellate orders dated 12.05.2020 passed by R2 confirming the rejection of the refunds claimed by the petitioner. The rejection is confirmed taking note of paragraph 2.5 of Board’s Circular No.37/18-Customs dated 09.10.2018, on the ground that there has been an excess claim of duty drawback by the petitioner, as per which, they have renounced their claim for Input Tax Credit (ITC).
Though the Writ Petitions challenge orders for the months of July, August, and September 2017, the petitioner does not pursue its claim for the month of July 2017 and files a memo dated 26.03.2021 requesting that the Writ Petition be closed as withdrawn. Accordingly, W.P.No.10969 of 2020 pertaining to appellate order dated 12.05.2020 in Appeal No.05/2020 for the month of July 2017 is dismissed as withdrawn.
Order of the Hon’ble Court:
It is clear from a reading of Section 54(3) that the petitioner is entitled to one or the other of two benefits, i) duty drawback or ii) Input Tax Credit. Thus, an option has been extended to an assessee engaged in the zero-rated sale to either claim the benefit of duty drawback or the benefit of refund of ITC. That is why, in the present case, the petitioner, for the month of July 2017 has opted to stick with the claim of duty drawback seeing as the amount of drawback is higher than the ITC for the months of August and September 2017.
On a plain reading of Section 54 (3), I find the claim of refund to be in order. The orders of the appellate authority are set aside and the authority is directed to refund the sanctioned amounts within a period of six (6) weeks from today. In doing so, the contents of paragraph 2.5 of the Circular will not stand in the way since a circular cannot stand in the way of a benefit offered under a statutory scheme. Paragraph 2.5 of the circular, insofar as it is contrary to the statutory provisions of Section 54(3) is bad in law.
The aforesaid view finds support from the decision of the Gujarat High Court in Real Prince Spintex Pvt. Ltd. (supra) and a learned single Judge of this Court sitting in Madurai Bench in Precot Meridian Ltd. (supra). W.P.Nos.10978 and 10972 of 2020 are allowed. No costs. Connected Miscellaneous Petitions are closed.
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