2020 (11) TMI 519 - HC - Customs

Refund claim - petitioner had deposited the TED which is not required in case of deemed exports, but in the absence of the provision of refund in the foreign trade policy, claim was rejected - whether the petitioner who was not required to deposit Terminal Excise Duty (TED) for export of goods from one unit to another, can the authorities remain as a mute spectator is not refunding the amount on the ground of any provision in the Foreign Trade Regulation and Development Act, 1992 with consequential relief of refund or alternatively quashing Ext.P2 letter dated 5.11.2019? HELD THAT - No doubt, under the different provisions of the Act, an alternative remedy has been provided for the affected parties to seek the vindication of the grievances, if any, but the quasi judicial authorities are also legitimately expected to take the congnizance of the matter in correct perspective by giving due consideration to the respective contentions and the law cited at the Bar, but should not pass an order in a most mechanical and sketchy manner, which is reflected from the impugned order Ext.P1. Development Commissioner in his order submitted that if the credit is availed, leavy certain, but if not availed, final goods are exempted, and in the absence of any provision of refund in the FTP, the case has been rejected. Once there was such finding, the Appellate Authority ought to have examined the matter in the background that it is a welfare State and the Department/ Government do not indulge into profit making. If inadvertently certain amount has been paid, even if there is no provision in the Foreign Trade Policy, Government cannot unduly retain the amount. The matter is remitted to the Appellate Authority by reviving the appeal Ext.P14. Appellate Authority is directed to decide the appeal afresh in accordance with law, by assigning reasons - Petition allowed by way of remand.

Summary

Issues Involved:
Challenge to appellate order regarding Terminal Excise Duty refund for deemed exports under Foreign Trade Policy 2009-14.

Analysis:
Issue 1: Challenge to Appellate Order
The petitioner challenged an order dated 15.01.2014 passed by the appellate Committee against the order of the Development Commissioner related to Terminal Excise Duty (TED) refund for deemed exports. The main question was whether the authorities can withhold the refund amount based on the Foreign Trade Regulation and Development Act, 1992, when the petitioner was not required to deposit TED for exporting goods from one unit to another.

Issue 2: Facts and Legal Background
The petitioner, a private limited company, is an Export Oriented Unit (EOU) engaged in manufacturing parts for ATM machines. The petitioner cleared goods to another EOU during 2010-May 2011, utilizing accumulated CENVAT Credit for central excise duty payment. The petitioner claimed that the clearances to the EOU were deemed exports under the Foreign Trade Policy 2009-14. The petitioner sought a refund of TED as per Para 8.5 of the Foreign Trade Policy, which was erroneously rejected previously.

Issue 3: Arguments and Review Application
The petitioner's counsel argued that the impugned order lacked reasons for rejection and failed to consider the petitioner's submissions. The petitioner filed a Review Application and RTI applications seeking the status of the review, which were not adequately responded to by the authorities. The Development Commissioner's order mentioned that if credit is availed, a levy is certain, but if not availed, final goods are exempted. However, the Appellate Authority should have considered the welfare aspect and not retained the amount if inadvertently paid.

Issue 4: Judgment and Remittance
The High Court set aside the impugned order and remitted the matter to the Appellate Authority for a fresh decision within two months. The Court emphasized that quasi-judicial authorities should consider contentions and laws cited, avoiding mechanical and sketchy orders. The Court directed the Appellate Authority to decide the appeal afresh, providing reasons for the decision.

In conclusion, the High Court's judgment revolved around the challenge to the appellate order regarding the refund of Terminal Excise Duty for deemed exports under the Foreign Trade Policy 2009-14. The Court highlighted the importance of thorough consideration by quasi-judicial authorities and directed a fresh decision with proper reasoning.