Circular cannot stand in the way of a benefit offered under statutory provisions

Last updated: 05 May 2021

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Quick Summary

The Madras High Court has ruled that a circular cannot prevent an exporter from receiving a benefit provided by statutory law. In this case, M/S. Chaizup Beverages LLP was denied a refund of Input Tax Credit (ITC) based on a customs circular regarding duty drawback claims. The court found this to be contrary to Section 54(3) of the CGST Act, which allows exporters to claim either duty drawback or a refund of unutilised ITC. The court set aside the rejection orders and directed the authorities to refund the sanctioned amount.

Court :
Madras High Court

Brief :
The Hon’ble Madras High Court in M/S. Chaizup Beverages LLP v. the Assistant Commissioner & Ors. [W.P. Nos. 10969, 10972 and 10978 of 2020 and WMP. Nos. 13335, 13339 and 13343 of 2020, dated March 26, 2021] set aside orders of Appellate Authority rejecting the refund claim of the assessee, on the ground of claim of excess duty drawback as per Circular No.37/2018-Customs dated October 9, 2018 ("Circular No. 37/2018- Customs") and directed the Authorities to refund the sanctioned amount. Held that, circular cannot stand in way of a benefit under a statutory scheme and is contrary to the statutory provisions of Section 54(3) of the Central Goods and Services Tax Act, 2017 ("CGST Act").

Citation :
W.P. Nos. 10969, 10972 and 10978 of 2020 and WMP. Nos. 13335, 13339 and 13343 of 2020, dated March 26, 2021

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