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In the present case, the petitioner has admittedly remitted 10% of the amounts demanded in order dated 14.06.2018 on 09.08.2018 as pre-deposit and no recovery shall be effected in regard to the balance of the demands that shall be deemed to be under an order of stay.In the light of the legal position as admitted above, the adjustment of the refund is not proper.

Shanti Prime Publication Pvt. Ltd.

Section 107 of the CGST Act, 2017— Recovery — The Petitioner, an exporter of tea sought a refund of the drawback sanctioned comprising the customs portion. The claim was sanctioned and the drawback paid over to the petitioner. Thereafter, a show cause notice was issued by the respondent on the ground that the claims that had been erroneously sanctioned as regards IGST and CGST on the ground that the petitioner had availed drawback at a higher rate than permissible. The show cause was confirmed and the refunds sanctioned were ordered to be recovered. The petitioner filed appeals challenging the orders of rejection before the Commissioner along with a deposit of 10% of the disputed amount. The petitioner filed another refund claims for the unutilized credit. Provisional refund orders have been passed by the respondent without affording any prior opportunity to the petitioner and restricting the refunds. The respondent has sanctioned refund after adjusting the outstanding dues. The Hon’ble Court observed that Section 107(7) of the CGST Act, 2017 provides that where 10% of disputed amount has been remitted by way of pre-deposit, the recovery of the balance amount shall be deemed to be stayed. 

Held that:-The Hon’ble High Court allowing the writ held the adjustment of the refund is not proper. The Respondent requested some time to refund the amount wrongly adjusted. He is granted a period of three (3) weeks from the date of receipt of the copy of this order to do so. — Chaizup Beverages LLP Vs. Deputy Commissioner of GST & Central Excise [2019] 09 TAXLOK.COM 080 (Madras)