HC Allows Refund of Unutilised Compensation Cess ITC on Coal Used for Export Goods

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 28 November, 2025

Latest from Taxmann

refund of unutilised cess ITC

Case Details: Atul Ltd. vs. Assistant Commissioner, CGST and Central Excise Division VIII [2025] 180 taxmann.com 591 (Gujarat)

Judiciary and Counsel Details

  • Bhargav D. Karia & Pranav Trivedi, JJ.
  • Abhay Y. Desai for the Petitioner.
  • Ms Hetvi H. Sancheti for the Respondent.

Facts of the Case

The petitioner, a manufacturer-exporter made zero-rated supplies, including exports and SEZ sales, and procured coal for captive power generation, on which Compensation Cess was paid and ITC was availed. It was submitted a claim for refund of accumulated unutilised Cess credit attributable to zero-rated supplies made with payment of IGST, contending that exported goods were not leviable to Cess. The jurisdictional officer under CGST issued a show-cause notice proposing rejection of the refund, subsequent adjudication and first appeal also rejected the claim. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the jurisdictional officer under CGST and the Department of Revenue misinterpreted the circulars. It was observed that since exports were subject to IGST and the final goods were not liable to Compensation Cess, the Cess ITC on coal remained unutilised. The Court concluded that, considering Section 54(3) of the CGST Act, Section 16(3) of the IGST Act, and Section 11(2) of the GST (Compensation to States) Act together, the petitioner could claim a refund of the unused Cess credit on coal used to manufacture exported goods. It also ruled that the proviso to Section 11(2) did not apply and therefore set aside the earlier orders, allowing the refund.

List of Cases Reviewed

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied