2017 (6) TMI 711 - AT - Central Excise

Refund of Terminal Excise Duty - supplies to 100% EOU - deemed export - denial on the ground that as per policy Circular No. 16 dated 15.03.2013, Terminal Excise duty is not payable for supply made to EOU Unit - Held that - similar issue has come up before the Hon ble High Court of Bombay in the case of Sandoz Pvt. Ltd vs. UOI 2016 (8) TMI 710 - BOMBAY HIGH COURT wherein the Terminal Excise duty paid by the assessee on the goods supplied to 100% EOU and re-credit of refund filed before the Central Excise authorities have been denied by the Hon ble High Court holding that the same is maintainable before DGFT - refund claim not maintainable - decided against appellant.

Summary

Issues:
Refund of Terminal Excise duty for supplies made to 100% EOUs; Denial of refund claim by DGFT citing policy Circular; Applicability of Circular No. 16 dated 15.03.2013; Maintainability of refund claim before Central Excise authorities.

Analysis:
The appellant, engaged in manufacturing Tin Plate components, supplied Tin Cans to 100% EOUs with a remark indicating no collection of excise duty and filing of Terminal Excise Duty claim with DGFT. The supplies were treated as deemed exports under the Foreign Trade Policy, allowing refund of Terminal Excise duty. However, DGFT refused the refund claim citing Circular No. 16 dated 15.03.2013, stating that Terminal Excise duty was not payable for EOU supplies. The appellant sought re-credit of the paid amounts, but authorities rejected the claim and issued a show cause notice under Section 11B of the Act.

During the hearing, the appellant cited similar cases before the High Courts of Bombay and Madras, where the issue of Terminal Excise duty refund for EOU supplies was deemed maintainable before DGFT, not Central Excise authorities. The High Court in the case of UOI vs. Alstom India Limited directed DGFT to decide such matters in line with the Foreign Trade Policy, 2009-2014.

The Tribunal, considering the precedents and legal interpretations, held that the refund claim/rebate of duty filed by the appellant before Central Excise authorities was not maintainable. Citing the decisions of the High Courts and the directive to DGFT for resolution, the Tribunal upheld the impugned order, dismissing the appeal by the appellant. The judgment emphasized the need for adherence to the policy framework and appropriate forums for resolving Terminal Excise duty refund issues related to supplies to 100% EOUs.