ALLEPPEY COMPANY LTD v UNION OF INDIA & ORS

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 6[TH] DAY OF DECEMBER 2023 / 15TH AGRAHAYANA, 1945 ``` ## **`WP(C) NO. 35947 OF 2023`** ## **`PETITIONER:`** ``` THE ALLEPPEY COMPANY LTD TAC HOUSE, NORTH VADAI CANAL ROAD, ALAPPUZHA, KERALA REPRESENTED BY ITS MANAGING DIRECTOR, MR. ASHOK VENUGOPAL, PIN - 688007 BY ADVS. AMMU CHARLES K.SRIKUMAR (SR.) S.A.MANSOOR (PATTANAM) ``` - `K.MANOJ CHANDRAN` ## **`RESPONDENTS:`** - `1 UNION OF INDIA REPRESENTED BY THE SECRETARY (REVENUE), NEW DELHI, PIN - 110003` - `2 DEPUTY DIRECTOR OFFICE OF THE ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GST INTELLIGENCE, KOCHI ZONAL UNIT, CENTRAL EXCISE BHAVAN, KATHRIKADAVU, KALOOR PO, KOCH, PIN - 682017` - `3 ASSISTANT COMMISSIONER (APPRAISING IMPORT) OFFICE OF COMMISSIONER OF CUSTOMS CUSTOM HOUSE, WILLINGDON ISLAND. COCHIN, PIN - 682009` - `4 ADDITIONAL DIRECTOR OFFICE OF THE ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GST INTELLIGENCE, KOCHI ZONAL UNIT, CENTRAL EXCISE BHAVAN, KATHRIKADAVU, KALOOR PO, KOCHI, PIN - 682017` ``` BY ADVS. JOSE ANTONY SMT.I. SHEELA DEVI ``` ``` SREELAL .N.WARRIER-SC ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) No.35947 of 2023 ``` ``` 2 ``` ## **JUDGMENT** ## **Dated this the 6[th] day of December, 2023** The petitioner-company registered under the Companies Act, 1956. The petitioner is engaged in the business of manufacturing and export of floor covering of various textile materials including coir. The petitioner has imported goods/raw materials for manufacturing of final export products under the various Export Promotion Schemes as notified by the Director General of Foreign Trade, Ministry of Commerce and Industry vide the Foreign Trade Policy issued from time to time. 2. The petitioner had claimed refund of IGST paid by him on import of raw materials from 23.10.2017 to 31.08.2021. A notice was issued by the 2nd respondent dated 17.11.2021 to the petitioner calling for the details with respect to the IGST refund claimed by them for the said period. The petitioner ``` WP(C) No.35947 of 2023 ``` ``` 3 ``` submitted the detail information/data as called for in respect of refund of IGST paid by on import. 3. A letter dated 04.03.2022 was issued by the Deputy Commissioner of Customs (Appg) based on the communication received from Director General of GST Intelligence, Kochi giving option to several companies including the petitioner to pay IGST along with interest for all the Bills of Entries for which refund had been availed under Rule 96(10) of the CGST Rules. The petitioner had remitted the entire IGST of Rs.2,42,03,799/- on the imported input materials which was originally not paid by them availing the exemptions under the respective notifications at the customs treasury. After making payment of the entire IGST of Rs.2,42,03,799/-, the petitioner requested the Commissioner of Customs for waiver of interest vide the letter dated 15.03.2022. However, the Assistant Commissioner of ``` WP(C) No.35947 of 2023 ``` ``` 4 ``` Customs (Imports) vide the Communication dated 15.12.2022, informed the petitioner that there was no provision for waiver of interest in the Customs Act, 1962. After receiving the said communication dated 15.12.2022, the petitioner had remitted the applicable interest of Rs.13,61,208/- on delayed payment of IGST to the Customs Department on 03.01.2023. 4. The petitioner thereafter sent a request on 04.01.2023 to the Deputy Commissioner Customs (Appg) for amending the Bills of Entry under Section 149 of the Customs Act so as to include the IGST amount in the respective Bills of Entry against which the payments were made. Unless and until the Bills of Entry are amended and the IGST amounts paid by the petitioner is incorporated, the petitioner would be deprived of his entitlement of Input Tax Credit of such IGST paid. Though the acknowledgment was ``` WP(C) No.35947 of 2023 ``` ``` 5 ``` issued regarding payment of the IGST and the interest paid thereon but no communication was sent to the petitioner for amending the Bills of Entry. Thereafter, a show cause notice was issued to the petitioner by the 4th respondent on 05.10.2023, demanding an amount of Rs.6,52,61,010/- being the IGST erroneously refunded on export of goods made during the period from 29.01.2019 to 31.08.2021citing violation of Rule 96(10) of CGST Rules along with interest and penalty. 5. The petitioner had sent a letter dated 25.10.2023 to the 4th respondent requesting him to defer the finalising of Ext.P11 show cause notice, till the Bills of Entry incorporating IGST paid towards the import of raw materials is issued by the Customs Department. It is further submitted that for some of identically placed exporters, the Deputy Commissioner of Customs had already issued ``` WP(C) No.35947 of 2023 ``` ``` 6 ``` certificates of deemed amendment of Bill of Entry under Section 149 of the Customs Act, 1962. Such certificates have been placed on record in Exts.P13 and P14 in the writ petition. 6. Learned counsel for the petitioner also submits that the Central Board of Indirect Taxes and Customs had issued Circular No.16/2023 dated 07.06.2023, which provides the procedure for amendment of Bill of Entry, in cases where the IGST is to be paid by the importer and cess along with the applicable interest. It is provided that for the relevant imports that do not meet this pre-import conditions and are required to pay IGST and Compensation Cess to that extent, the importer may approach the concerned assessment group at the POI with relevant details for the purposes of payment of the tax and cess along with applicable interest and on such application for the payment of tax and cess along ``` WP(C) No.35947 of 2023 ``` ``` 7 ``` with applicable interest, the assessment group at POI shall cancel the OOC and indicate the reason in remarks. The Bill of Entry shall be assessed again so as to charge the tax and cess, in accordance with the judgment of the Supreme Court dated 28.04.2023 in the matter of C.A No. 290 of 2023 (Union of India and others vs. Cosmo Films Ltd). Learned counsel for the petitioner submits that the petitioner has already remitted the IGST along with the interest and therefore, considering the provisions as laid down in the said circular, the OOC is required to be cancelled and the Bill Entry is to be assessed/amended accordingly so that the petitioner can claim the eligible Input Tax Credit. 7. Sri. Sreelal N.Warrier, learned Standing Counsel appearing for respondents 2 and 3, submits that because of the judgment of the Supreme Court in the case of **ITC Ltd v. Commissioner of Central** ``` WP(C) No.35947 of 2023 ``` ``` 8 ``` **Excise, Kolkata** [2019 KHC 6932], some difficulty was felt for allowing an assesee to amend the Bill of Entry. However, the Division Bench of the Telangana High Court in the case of **Sony India Pvt.Ltd v. Union of India** , rendered judgment on W.P.(C.) No.4793 of 2021 dated 12.08.2021, has held that the power to amend the Bill of Entry under Section 149 of the Customs Act, 1962 is a discretionary power vested with the Authority and if, on account of incorrect determination of duty by the Assessing Authority initially, an assessee is compelled to seek amendment of Bill of Entry under Section 149 of the Act, such an assessee shall be permitted to amend the Bill of Entry. 8. The said judgment passed in the case of Sony India Pvt. Ltd (supra) has also been taken note of. Paragraphs 34 to 36 are relevant and which extracted hereunder: ``` WP(C) No.35947 of 2023 ``` ``` 9 ``` “34. In the decision of the Supreme Court in ITC Ltd. MANU/SC/1284/2019 : (2019) 17 SCC 46 (supra) while holding that the refund cannot be granted by way of a refund application under Section 27 of the Act until and unless an assessment order is modified and a fresh order of assessment is passed and duty re-determined, the Supreme nowhere said that such amendment or modification of an assessment order can only be done in an Appeal under Section 128. In para 47, the Court held categorically: "47...... we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or selfassessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of selfassessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. ” ## (emphasis supplied) 35. Thus, even the Supreme Court clearly indicated that the modification of the assessment order can be either under Section 128 or under other relevant provisions of the Act i.e. Section 149. 36. Therefore, the stand of the respondents in the counter affidavit that only reassessment under Section 128 is the remedy available to the petitioner, and Section 149 cannot be ``` WP(C) No.35947 of 2023 ``` ``` 10 ``` invoked, is not tenable. We also reject the plea of the 2nd respondent that there is no possibility of getting modified an order of assessment under any other relevant provision and that petitioner is trying to overcome limitations stipulated in Section 128.” Considering the said judgment of the Telangana High Court and the Circular No.16/2023 , the present writ petition is disposed of with a direction to the 3 rd respondent to consider the request of the petitioner in Ext.P8 in the light of the judgment passed by the Telangana High Court and the provisions of the Circular No.16/2023 issued by the Central Board of Indirect Taxes and Customs, preferably within a period of 15 days from today. Till such decision is taken, further proceedings in pursuance to Ext.P11 shall not be undertaken. **Sd/DINESH KUMAR SINGH JUDGE** AP ``` WP(C) No.35947 of 2023 ``` ``` 11 ``` ## **`APPENDIX OF WP(C) 35947/2023`** ``` PETITIONER EXHIBITS Exhibit P1TRUE COPY OF THE COMMUNICATION DATED 17.11.2021 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P2TRUE COPY OF THE REPLY DATED 13.12.2021 SUBMITTED BY THE PETITIONER TO PRINCIPAL ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GST INTELLIGENCE Exhibit P3TRUE COPY OF THE LETTER DATED 04.03.2022 ISSUED BY THE DEPUTY COMMISSIONER OF CUSTOMS (APPG) TO THE PETITIONER Exhibit P4TRUE COPY OF THE CHALLAN DATED 25.02.2022 EVIDENCING PAYMENT OF ENTIRE IGST OF RS. 2,42,03,799/- BY THE PETITIONER Exhibit P5TRUE COPY OF THE REQUEST DATED 15.03.2022 SUBMITTED BY THE PETITIONER TO THE COMMISSIONER OF CUSTOMS Exhibit P6TRUE COPY OF THE LETTER DATED 15.12.2022 SENT BY THE 3RD RESPONDENT TO THE PETITIONER Exhibit P7TRUE COPY OF THE CHALLAN DATED 03.01.2023 EVIDENCING PAYMENT OF INTEREST OF RS. 13,61,208/- BY THE PETITIONER Exhibit P8TRUE COPY OF THE REQUEST DATED 04.01.2023 SENT BY THE PETITIONER TO DEPUTY COMMISSIONER CUSTOMS (APPG Exhibit P9TRUE COPY OF THE LETTER DATED 10.02.2023 SENT BY THE PETITIONER TO THE COMMISSIONER OF CUSTOMS Exhibit P10TRUE COPY OF THE ACKNOWLEDGMENT LETTER DATED 03.04.2023 SENT BY THE 3RD RESPONDENT TO THE PETITIONER Exhibit P11TRUE COPY OF THE SHOW CAUSE NOTICE DATED 05.10.2023 ISSUED BY THE 4TH RESPONDENT TO THE PETITIONER Exhibit P12TRUE COPY OF THE LETTER DATED 25.10.2023 SENT BY THE PETITIONER TO THE 4TH RESPONDENT OFFICE Exhibit P13TRUE COPY OF THE AMENDMENT CERTIFICATE ``` ``` WP(C) No.35947 of 2023 ``` ``` 12 ``` ``` DATED 16.06.2022 ISSUED TO M/S TUFKO INTERNATIONAL BY THE DEPUTY COMMISSIONER OF CUSTOMS Exhibit P14TRUE COPY OF THE AMENDMENT CERTIFICATE DATED 20.05.2022 ISSUED TO M/S SPECTA DéCOR PVT. LTD. BY THE DEPUTY COMMISSIONER OF CUSTOMS ```