Case Law Details
LGW Industries Limited & Anr. Vs. Principal Commissioner, CGST & Central Excise (Calcutta High Court)
Duty drawback and IGST/unutilized input tax credit refund of many a exporters are being withheld by the department without assigning any reasons whatsoever by categorizing them as ‘Risky Exporter’ on customs portal, Indian Customs EDI System.
The ostensible purpose of such classification is to prevent refund to an unscrupulous exporter who has availed fraudulent input tax credit. However, it has been observed that such tag is not being removed in almost all the cases despite compliance with the SOP issued by the CBIC vide Circular No. 131/1/2020-GST dated 23-1-2020 for removal such tag.
There is a strict timeline to be observed by the officers to complete the investigation to ensure that genuine exporters are not harassed but exporting community is suffering because of lackadaisical attitude of the department.
In any case in my opinion duty drawback should not withheld at all since in such cases 100% examination of export transactions is done after being tagged as risky exporter and therefore there is no doubt about the veracity of the exports.
in my view the only remedy available to an exporter in such cases is to file a writ petition before the jurisdictional High Court.
Hon’ble Calcutta High Court recently removed the “Risky Exporter” tag in one such case and directed the authority concerned to process the duty draw back as well as the refund claim of the IGST within three weeks from the date of receipt of the order, subject to verification of the validity of the claim of the petitioner. (LGW Industries Limited & Anr. Vs. Principal Commissioner, CGST & Central Excise, Kolkata North commissionerate & Ors – W.P.A. 15807 of 2021).
The matter was represented by me with Ms. Priya Sarah Paul & Mr. Kaushal Agarwal. Department was represented by Mr. B. P. Banerjee, Mr. Abhradip Maity.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
Heard learned advocates appearing for the parties.
Learned advocate appearing for the petitioner submits that the issue involved in this writ petition regarding “Risky Exporter” tag on the petitioner is directly covered in its favour by the order of the Division Bench of this Court dated 7th July, 2022 in the case of M/s. Nexage Innovations, a partnership firm & anr. Vs. The Deputy Commissioner of Customs & ors. in MAT 916 of 2022 with IA No.CAN 1 of 2022.
Mr. Banerjee, learned advocate appearing for the respondent authority concerned does not differ or disagree with the submission made by the petitioner.
Considering the facts and circumstances of this case, this writ petition being WPA 15807 of 2021 is disposed of by directing the respondent/authority concerned to remove the “Risky Exporter” tag within three weeks from the date of receipt of this order and further the respondent/authority concerned shall process the duty draw back claim made by the petitioner as well as the refund claim of the IGST within three weeks from the date of receipt of this order, subject to verification of the validity of the claim of the petitioner.
With this observation and direction, this writ petitioner being WPA No.15807 of 2021 and the application being CAN 1 of 2022 stand disposed of.
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