2021 (7) TMI 1104 - HC - Customs

Deemed Export scheme - supplies effected by the petitioner to M/s. Reliance Petroleum Limited for their project at Gujarat - new refinery project or not - applicability of exemption granted under the Customs Notification No. 36 of 1997, dated 11-4-1977 - HELD THAT - As seen from the impugned orders, without any basis, just based on the Department of Economic Affairs Clarification, the respondents have rejected the petitioner s claim for Customs duty exemption under the Notification dated 13-6-1997 issued by the Ministry of Finance (Department of Revenue). Hence, this Court is of the considered view that the impugned orders, namely, the order in appeal passed by the second respondent dated 5-6-2015 as well as the order of the Original authority dated 25-5-2010 passed by the fourth respondent have been passed by total non-application of mind to the documents produced by the petitioner. The impugned orders passed by the second respondent dated 5-6-2015 as well the order dated 25-5-2010 passed by the fourth respondent will have to be necessarily quashed and the matter remanded back to the original authority, namely, the fourth respondent for fresh consideration on merits and in accordance with law - Petition allowed by way of remand.

Summary

Issues:
Challenge to Order-in-Appeal confirming Original Authority's decision on deemed export supply and customs duty exemption eligibility.

Analysis:
The petitioner contended that their supply to M/s. Reliance Petroleum Limited qualifies as a deemed export, supported by special imprest licenses and Customs Notification No. 36 of 1997. They argued that the supplies were for a new refinery project, not expansion. However, authorities held otherwise, citing letters from the Department of Economic Affairs. The petitioner highlighted documents proving the new refinery project nature, which were not considered by the authorities. The Court noted the non-application of mind by the authorities and quashed the orders, remanding the matter for fresh consideration.

The respondents maintained that the supplies were for expansion, not a new refinery project, based on Department of Economic Affairs' letters. They argued against the petitioner's eligibility for deemed export benefits. The Court observed the lack of consideration of crucial documents by the authorities, leading to the quashing of their orders for fresh review.

The Court emphasized that documents supporting the petitioner's claim of supplying to a new refinery project during the 9th plan period were crucial but overlooked by the authorities. By solely relying on one clarification letter, the authorities failed to consider substantial evidence presented. Consequently, the Court quashed the orders and directed a reevaluation by the original authority, stressing the importance of a thorough review based on all relevant documents.

In conclusion, the Court quashed the orders passed by the authorities, remanding the matter for a fresh decision within four months, considering all documents provided by the petitioner. The Court disposed of the Writ Petition without costs, closing the connected miscellaneous petition.