Facts of the Case

The petitioner, an exporter of coir and other textile floor coverings, had claimed refund of IGST paid on imported raw materials from 23.10.2017 to 31.08.2021 under various Export Promotion Schemes. Pursuant to a communication from DGGI Kochi regarding Rule 96(10) of the CGST Rules, the petitioner was given the option to pay IGST with interest on Bills of Entry for which refund had been availed alongside import exemptions, and remitted the entire IGST of Rs.2,42,03,799 along with interest of Rs.13,61,208. The petitioner then sought amendment of the underlying Bills of Entry under Section 149 of the Customs Act to reflect the IGST paid, which is necessary to claim input tax credit, but received no response. A show-cause notice dated 05.10.2023 was thereafter issued by DGGI demanding Rs.6,52,61,010 as IGST allegedly erroneously refunded, citing violation of Rule 96(10).

Issues Involved

  1. Whether the petitioner is entitled to amendment of the Bills of Entry under Section 149 of the Customs Act to reflect the IGST subsequently paid.
  2. Whether the pending show-cause notice proceedings should be kept in abeyance pending a decision on the amendment request.

Petitioner's Arguments

  • Having paid the entire disputed IGST and interest, the petitioner was entitled to amendment of the Bills of Entry under Section 149 of the Customs Act to enable claiming input tax credit; similarly placed exporters had already received such amendment certificates.
  • Relied on CBIC Circular No.16/2023 dated 07.06.2023, issued pursuant to the Supreme Court's ruling in Union of India vs Cosmo Films Ltd, and on the Telangana High Court's ruling in Sony India Pvt. Ltd vs Union of India, holding that amendment under Section 149 remains available even where duty was initially incorrectly determined.

Respondent's Arguments

  • Relied on the Supreme Court's ruling in ITC Ltd vs Commissioner of Central Excise, Kolkata, to contend that only reassessment through appeal under Section 128 of the Customs Act — not amendment under Section 149 — was available to the petitioner.

Court Order-Findings

  • Examined the Telangana High Court's ruling in Sony India Pvt. Ltd, which held that even the Supreme Court's ITC Ltd judgment did not confine correction of an assessment order to an appeal under Section 128, and that Section 149 remains an independent, discretionary remedy for amendment of a Bill of Entry.
  • Considering the Sony India ruling and CBIC Circular No.16/2023, the writ petition was disposed of with a direction to the Customs authority (3rd respondent) to consider the petitioner's amendment request within 15 days, in light of the judgment and the Circular.
  • It was directed that further proceedings pursuant to the show-cause notice shall not be undertaken until that decision is taken.

Important Clarification

  • Amendment of a Bill of Entry under Section 149 of the Customs Act remains available as a discretionary remedy independent of the appellate route under Section 128, including to correct the IGST payable on imports flagged under Rule 96(10) of the CGST Rules, in accordance with CBIC Circular No.16/2023.

Sections Involved

  • Rule 96(10), CGST Rules, 2017 — restricts IGST refund where certain import duty exemptions were availed.
  • Section 149, Customs Act, 1962 — amendment of documents including Bills of Entry.
  • Section 128, Customs Act, 1962 — appeal against assessment orders.

Decision-In Favour of

Assessee, procedurally — disposed of with a direction for reconsideration of the amendment request and a stay on further show-cause notice proceedings pending that decision; not a final adjudication on the underlying IGST refund demand.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.35947 of 2023
  • CNR: Not available
  • Coram: Hon'ble Mr Justice Dinesh Kumar Singh
  • Decision Date: 06-12-2023

Link to Download the Order

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