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2015 (8) TMI 292 - HC - CustomsRefund of terminal excise duty already paid Goods supplied against International competitive bidding Held that - As per Entry 91 of Notification, 2006 and Para 8.3 of Foreign trade policy, all goods supplied against International Competitive Bidding (ICB) were exempted from duty of excise Petitioner had paid excise duty and thereafter made claim for refund of excise duty paid Procedure adopted by Single Judge was fallacious in light of settled principle of law that Court cannot direct statutory authority to exercise discretion in particular manner therefore, Single Judge ought not to have directed DGFT to pass order keeping in mind observations made therein Whole controversy was with regard to interpretation of provisions of statutory policy When supplies were made against ICB, TED was exempted Respondent failed to avail exemption for supplies Also respondent had not disputed fact that TED was paid by availing CENVAT Credit Account in terms of CENVAT Credit Rules, 2004 Impugned orders hereby set aside DGFT to consider application of respondent for refund in terms of provisions of FTP, 2009-2014 Appeals disposed off Decided against Revenue.
Issues Involved:
1. Entitlement to refund of Terminal Excise Duty (TED) under Foreign Trade Policy (FTP) for supplies made against International Competitive Bidding (ICB). 2. Interpretation of Paragraph 8.3(c) of FTP regarding exemption and refund of TED. 3. Legality of the orders passed by the learned Single Judge directing DGFT to refund TED. 4. Applicability of CENVAT Credit Rules in the context of deemed exports and TED refund. Detailed Analysis: 1. Entitlement to Refund of Terminal Excise Duty (TED) under FTP for Supplies Made Against ICB: The writ petitioner, a sub-contractor of BHEL, supplied boiler components to NTPC under ICB and paid TED. The petitioner sought a refund of TED, claiming exemption under the FTP. The DGFT initially rejected the refund application, which was subsequently challenged and set aside by the learned Single Judge, who directed the refund. The Union of India appealed against this decision. 2. Interpretation of Paragraph 8.3(c) of FTP Regarding Exemption and Refund of TED: Paragraph 8.3(c) of the FTP provides for exemption from TED for supplies made against ICB and refund of TED in other cases. The learned Single Judge observed that since the petitioner had not availed the exemption but paid TED, they were entitled to a refund. However, the appellants argued that refund under Paragraph 8.3(c) is not available for supplies made against ICB, as TED is exempted for such supplies, and the petitioner cannot claim a refund after opting to pay TED. 3. Legality of the Orders Passed by the Learned Single Judge Directing DGFT to Refund TED: The learned Single Judge's orders directing DGFT to refund TED were challenged on the grounds that the court cannot dictate the statutory authority to exercise discretion in a particular manner. It was held that the court can only command the statutory authority to exercise discretion according to law. The appellate court found the learned Single Judge's direction to DGFT to pass an order keeping in mind certain observations to be fallacious and set aside the orders. 4. Applicability of CENVAT Credit Rules in the Context of Deemed Exports and TED Refund: The appellants contended that the writ petitioner paid TED through CENVAT Credit Account, and refund of CENVAT Credit is not permissible for deemed exports under FTP. The petitioner argued that neither FTP nor FTDR Act expressly prohibits refund of TED paid through CENVAT Credit Account. The appellate court noted that the entitlement to claim refund under Paragraph 8.3(c) of FTP, given the use of CENVAT Credit Account, requires deeper consideration and should be initially examined by the competent statutory authority. Conclusion: The appellate court set aside the orders of the learned Single Judge and the DGFT's rejection order dated 24.02.2015. The DGFT was directed to reconsider the petitioner's refund application in accordance with the provisions of FTP, 2009-2014, and pass an appropriate order within six weeks, after providing an opportunity of being heard to the petitioner. The appeals were disposed of with no order as to costs.
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