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2023 (8) TMI 1165 - HC - Customs100% EOU - non-inclusion of value of deemed exports in the total value of exports - shortage in the entitlement of the petitioner while clearing its finished goods in terms of paragraph 6.8 of the Foreign Trade Policy - ineligibility for DTA Sale with regard to deemed exports - HELD THAT - In view of what has been held by the Hon ble Supreme Court in Arvind Cotspin 2023 (2) TMI 825 - SUPREME COURT , the said order is liable to be set aside - It was held in the case that the benefit of deemed exports was liable to be considered and the distinction between deemed exports and physical exports has been done away for the relevant period. The impugned order is set aside holding that the petitioner is not eligible for DTA sale in respect of deemed exports, on the basis of clarification dated 17.11.2008 received from respondent no. 2 which is ultimately based on the Office Memorandum dated 07.10.2008 and taking into consideration the application format for DTA Sale given at Annexure-A to Appendix 14-I-H of Handbook of Procedures, Volume-I and, for issuance of writ in the nature of mandamus directing the respondents to grant the benefit of deemed exports to the petitioner for calculating FOB value of exports in terms of para 6.8(a) of the Foreign Trade Policy. The petitioner is held entitled to benefit of deemed exports while calculating free onboard value of exports in terms of paragraph 6.8(a) of the Foreign Trade Policy. The benefit for the same be calculated and granted accordingly for the period from October-2005 to December-2007.
Issues involved:
The judgment addresses the entitlement to the benefit of 'deemed exports' while calculating the free onboard value of exports in terms of paragraph 6.8(a) of the Foreign Trade Policy for the relevant period. Summary: Issue 1: Entitlement to Benefit of 'Deemed Exports' The petitioner, a Company incorporated under the Companies Act, 1956, claimed to be an Export Oriented Unit with permission to import and export products under the Foreign Trade Policy. The petitioner cleared goods under the Domestic Tariff Area (DTA) Sale from October 2005 to December 2007, paying excise duty. A show cause notice was issued alleging excess clearance beyond the prescribed limit. The petitioner argued that since the sale was covered under 'deemed exports', no extra excise duty was due. Despite a clarification submitted, an order was passed holding the petitioner liable for differential duty. The petitioner challenged this order seeking entitlement to the benefit of 'deemed exports' for calculating the value of exports. Issue 2: Consideration of Writ Petition Post Supreme Court Decision The consideration of the writ petition was deferred pending a similar issue being considered by the Honorable Supreme Court in a Special Leave Petition. Following the Supreme Court's decision in the related case, the writ petition was taken up for consideration. Issue 3: Legal Arguments and Court's Decision The petitioner's counsel argued that the Supreme Court's decision in the related case favored the petitioner's entitlement to the benefit of 'deemed exports'. The Deputy Solicitor General of India concurred, acknowledging the removal of the distinction between 'deemed exports' and physical exports for the relevant period. The Court, after reviewing the Supreme Court's decision, found that the petitioner was entitled to the benefit of 'deemed exports' based on the application process and relevant policy provisions. The Development Commissioner's order denying relief on the grounds of ineligibility for DTA Sale with regard to 'deemed exports' was set aside. Conclusion The Court allowed the writ petition, quashing the impugned order and directing the authorities to grant the benefit of 'deemed exports' for calculating the value of exports in accordance with the Foreign Trade Policy. The petitioner was held entitled to the benefit of 'deemed exports' for the specified period, and consequential steps were to be taken within two months. This summary provides a detailed overview of the judgment, highlighting the issues involved, legal arguments presented, and the Court's decision in each aspect.
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