2017 (2) TMI 931 - HC - Customs

Refund - The grievance of the Petitioner is that during the course of this business and the period under dispute, it supplied these goods to various licence holders who had obtained the invalidation letters from the Regional Office of the Director General of Foreign Trade without payment of CENVAT duty - Held that - the Respondents will not be influenced by the mere recommendations of some authority in the Ministry and which recommends cancellation of the invalidation letters / EPCG licences. It will decide the controversy on the footing that when the concerned dealings and transactions took place, there was an authorization in the form of invalidation letter, there was a communication copy of which is at Annexure-A to the Writ Petition and that the Policy Interpretation Committee issued the clarification later namely, on 4th December, 2012 - they will pass a fresh speaking order after hearing the writ petitioner / their representative and pass an order uninfluenced by any of the statements made in their affidavit in reply and the communications relied upon - Petition disposed of.

Issues:
- Validity of diverse communications issued by the Foreign Trade Development Officer
- Jurisdiction of the Policy Interpretation Committee
- Entitlement to deemed export benefit
- Refund of terminal excise duty and duty drawback
- Cancellation of invalidation letters and EPCG licenses
- Principles of natural justice in decision-making

Validity of diverse communications issued by the Foreign Trade Development Officer:
The Petitioner sought relief through a writ petition under Article 226 of the Constitution of India to challenge various communications issued by the Foreign Trade Development Officer. The Petitioner claimed that these communications, along with a clarification from the Policy Interpretation Committee, were invalid and sought their quashing. The Petitioner contended that the clarification issued by the Committee was without jurisdiction, null, void, and not binding. The Court noted the grievances raised by the Petitioner regarding the rejection of claims and the denial of deemed export benefits for goods supplied against invalidation letters. The Court emphasized the need for a fair hearing and directed the Respondents to reconsider the Petitioner's claims and issue a fresh order after hearing the Petitioner.

Jurisdiction of the Policy Interpretation Committee:
The Petitioner highlighted concerns regarding the Policy Interpretation Committee's meeting and its impact on the rejection of claims. The Court observed that the Deputy Director General of Foreign Trade had relied on the Committee's clarifications to advise the cancellation of invalidation letters and EPCG licenses. The Petitioner argued that the goods supplied against valid and subsisting invalidation letters should not be affected by subsequent clarifications. The Court emphasized the importance of natural justice principles and directed the Respondents to consider the matter afresh, ensuring that decisions are not influenced solely by recommendations.

Entitlement to deemed export benefit and refund of duties:
The Petitioner claimed entitlement to deemed export benefits for goods supplied to EPCG license holders and sought refunds of terminal excise duty and duty drawback. The Court noted the Petitioner's submissions regarding the duty involved in deemed exports and the application for duty refunds. The Respondents were directed to reconsider the Petitioner's applications for refunds, ensuring a fair hearing and providing reasons for their conclusions.

Cancellation of invalidation letters and EPCG licenses:
The Court addressed the issue of potential cancellation of invalidation letters and EPCG licenses based on the Committee's clarifications. The Petitioner argued that such cancellations should not be advised without proper consideration and natural justice. The Court directed the Respondents to make decisions independently, considering the validity of past transactions and authorizations, and to issue speaking orders after hearing the Petitioner.

Principles of natural justice in decision-making:
Throughout the judgment, the Court emphasized the importance of natural justice principles in decision-making processes. The Court directed the Respondents to provide a fair hearing to the Petitioner, reconsider the claims and applications, and issue fresh orders based on independent assessments, uninfluenced by mere recommendations. The Court highlighted the need for a thorough review of past dealings and transactions, ensuring that decisions are made transparently and in accordance with legal principles.

Conclusion:
The High Court of Bombay addressed multiple issues raised by the Petitioner regarding the validity of communications, jurisdiction of the Policy Interpretation Committee, entitlement to benefits, refund of duties, potential cancellations, and principles of natural justice. The Court directed the Respondents to reconsider the Petitioner's claims, provide fair hearings, and issue fresh orders based on independent assessments, ensuring transparency and adherence to legal principles.

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