2014 (2) TMI 773 - HC - Customs

Refund claim of Terminal Excise Duty (TED) - Supply of manufactured goods to 100% EOU - Deemed export - Denial in terms of the provisions of the Foreign Trade Policy 2009-14 framed under the Foreign Trade (Development and Regulation) Act, 1992 - Held that - petitioner did not make any supplies against the ICB. Therefore, it would be covered by latter part of para 8.3(c), i.e. cases where refund of TED will be given. This intention is given effect by the second entry in column (a) of para 8.4 read with corresponding benefits spelt-out in column (c) which states that entitlement in terms of para 8.3 to refund is permissible. The eligibility for refund, therefore, would be in terms of these provisions and the unit has to apply for such refund - authorities in this case appear to have proceeded to make an order adverse to the petitioner and proceeded to hold that the petitioner was disentitled to the benefit of refund in view of some clarification given by the Policy Interpretation Committee, in its meeting of 04.12.2012 to the effect that refund of CENVAT credit provisions are available under Excise rules and CENVAT rules which should be availed of rather than claiming refund . This reasoning appears to have prevailed with the Policy Relaxation Committee as well in this case. Court also is unable to see the reason why the respondents were of the view that refund claim or benefit under the CENVAT regime under the Central Excise Act or the other statutory schemes framed under it is available. In this Court s opinion, that regime operates in its own terms and is independent of the rights and liabilities of the petitioner and the respondents under the import-export policies framed under the 1992 Act - The respondents are hereby directed to process and pass appropriate orders in accordance with the 2009 policy in respect of the petitioner s refund claims made through its applications dated 29.08.2012 and 16.11.2012 within three months - Decided in favour of assessee.

Summary

Issues:
Challenge to denial of refund claim under Foreign Trade Policy 2009-14.

Analysis:
1. The petitioner challenged the denial of its refund claim under the Foreign Trade Policy 2009-14. The petitioner, engaged in manufacturing metal powders, claimed refund of Terminal Excise Duty (TED) for supplies made to Export-oriented Units (EOUs) during specific periods. The refund applications were denied by the third respondent, leading to subsequent correspondence seeking relaxation, which was also turned down.

2. The petitioner contended that its unit and supplies should be treated as "deemed export" as per the policy provisions. The petitioner relied on specific paras of the policy, such as para 8.2(b) and para 8.3(c), to claim benefits entitled to deemed export units. The policy was further relaxed from 01.04.2013, exempting such units from paying TED. The petitioner argued that the subsequent amendment should not be a reason for denying the refund claim under the existing policy.

3. The respondents, however, relied on counter-affidavits and communications directing adherence to the amended circular. They suggested the petitioner seek refund under the Central Excise Act. The Court noted that the petitioner's engagement in deemed export was undisputed, and its entitlement to benefits under the policy was clear from relevant policy provisions.

4. The Court emphasized that the petitioner's eligibility for refund should be determined under the existing policy provisions, irrespective of subsequent amendments. The Court referred to a similar decision by the Calcutta High Court, emphasizing entitlement to refund once goods fall within the deemed export category. Consequently, the impugned orders denying the refund claim were quashed, directing the respondents to process the petitioner's refund claims in accordance with the 2009 policy within three months.

This detailed analysis of the judgment highlights the petitioner's challenge, the contentions made, the respondents' arguments, and the Court's reasoning leading to the decision to quash the denial of the refund claim under the Foreign Trade Policy 2009-14.