2024 (6) TMI 511 - HC - Customs

Refund of terminal benefits of excise duty - deemed exports - Sl.No.511 of N/N.12/2012- cus dated 17.03.2022 - The petitioner was the successful bidder for the tender floated by the third respondent for the work of construction of Tsunami bund and retaining wall for 500 Mwe Prototype Fast Breeder Reactor (hereinafter referred to as PFBR ) project at Kalpakkam. - HELD THAT - The term deemed export is a creation of Export Import Policy and not defined under Central Excise Law. The benefits available to physical exports are also available to the deemed exports and the deemed exports are treated on par with physical export. In fact, in the physical export, the exporters is entitled to get refund of the excise duty paid on the raw materials. Likewise, under the deemed exports, by the Export Import Policy, TED is allowed. Therefore, the claim of the petitioner cannot be rejected on the ground that the goods supplied by the petitioner cannot be deemed exports. On perusal of the counter filed by the third respondent revealed that as per the terms of contract, the petitioner is entitled for the TED and the third respondent required to forward a certificate issued by the beneficiary of the contract viz., M/s. Bharatiya Nabhikiya Vidyut Nigam Limited, to the first respondent. On perusal of letter dated 09.11.2015, issued by the third respondent also revealed that the refund clause of the FTP under which the petitioner is entitled for the claim of TED, sufficiently proved and satisfy the discharge of the obligations on the part of the third respondent. However, the petitioner unable to obtain the benefits from the first respondent. The impugned order cannot be sustained and it is liable to be quash - Petition allowed.

Summary

Issues:
Challenge to rejection of claim for refund of terminal benefits of excise duty.

Detailed Analysis:
1. The petitioner challenged the rejection of their claim for refund of terminal benefits of excise duty related to a construction project for a nuclear power project. The petitioner had submitted all necessary documents to claim the refund as per the Foreign Trade Policy (FTP) but was rejected twice by the first respondent without proper consideration of the documents.

2. The petitioner argued that the construction project falls under the category of deemed exports, making them eligible for the refund of excise duty. They contended that the Joint Director of the Atomic Energy Department had certified the project as a nuclear power project, entitling them to the benefit of terminal excise duty. The petitioner emphasized that the first respondent, being the implementing authority, cannot deny the benefit based on eligibility criteria certified by the atomic energy department.

3. The Central Government Standing Counsel representing the first and second respondents argued against the petitioner's claim, stating that the construction of Tsunami protection bund and retaining wall was not part of the nuclear power project and therefore not eligible for deemed export benefits. They highlighted specific provisions of the FTP related to refunds on supplies of steel and cement, emphasizing that the petitioner did not qualify for deemed export benefits as per the policy.

4. The court examined the policy regarding deemed exports under Chapter 7 of the FTP, which includes provisions for supplies to nuclear power projects to be considered as deemed exports under certain conditions. The court clarified that deemed exports are treated similarly to physical exports in terms of benefits, including the refund of terminal excise duty. The court also noted that the terms of the contract between the parties entitled the petitioner to the terminal excise duty refund.

5. After considering the arguments and evidence presented, the court found in favor of the petitioner. The court quashed the orders rejecting the petitioner's claim and directed the first respondent to pass appropriate orders granting the refund of terminal excise duty based on the recommendation of the atomic energy department within a specified timeframe. The court allowed the writ petition and closed the connected miscellaneous petition without any costs.

This detailed analysis outlines the key arguments, legal provisions, and court's decision regarding the challenge to the rejection of the claim for refund of terminal benefits of excise duty in the judgment delivered by the Madras High Court.