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2023 (5) TMI 677 - HC - CustomsRefund of Terminal Excise Duty (TED) - whether the DTA Units who had paid Excise Duty at the time of supply of goods to the EOU s, utilizing their CENVAT Credit, can claim refund of the same in light of the provisions of the FTP (2209-2014)? HELD THAT - It has been stated before this Court that the said issue stands covered by the judgment delivered by the Hon ble Supreme Court in Sandoz Private Limited Vs. Union of India Others, 2022 (1) TMI 225 - SUPREME COURT , wherein the Hon ble Supreme Court while allowing the claim for refund of TED has held that in the case of DTA supplier of goods to EOU, if TED has been paid by utilizing CENVAT credit, the refund would be in the form of reversal of commensurate amount of CENVAT credit amount. This Court has carefully gone through the judgment delivered by the Hon ble Supreme Court in Sandoz Private Limited and the issue involved in the present case stands concluded on account of the said judgment. The Respondent herein/ Petitioner shall be entitled for refund in accordance with law - Application disposed off.
Issues Involved:
1. Entitlement of refund of Terminal Excise Duty (TED) by Domestic Tariff Area (DTA) units for supplies made to 100% Export Oriented Units (EOUs). 2. Applicability of Foreign Trade Policy (FTP) provisions and amendments. 3. Impact of Goods & Services Tax (GST) regime on refund claims. Summary of Judgment: Issue 1: Entitlement of Refund of TED by DTA Units for Supplies to EOUs The controversy involves whether DTA units that paid excise duty using CENVAT credit for supplies to EOUs can claim a refund of the same under the FTP (2009-2014). The court noted that the DTA units supplied excisable goods to EOUs and sought a refund of TED, which was initially rejected by the Joint Director General of Foreign Trade based on a policy circular dated 15.03.2013. The learned Single Judge allowed the writ petition, setting aside the orders rejecting the refund claim, and directed the respondents to process the refund claim for TED. Issue 2: Applicability of FTP Provisions and Amendments The court referenced the judgment in Kandoi Metal Powders Mfg. Co. Pvt. Ltd., which held that the Cenvat regime under the Central Excise Act operates independently of the import-export policies under the FTP. The Single Judge's decision was supported by various precedents, including the Calcutta High Court's ruling in IFGL Refractories Ltd., which emphasized that the right to a refund of TED could not be taken away due to procedural deficiencies. The court also noted that the policy circular dated 15.03.2013 was considered and rejected in previous judgments, affirming the entitlement of DTA units to a refund of TED. Issue 3: Impact of GST Regime on Refund Claims The court acknowledged the argument that with the introduction of the GST regime, the CENVAT credit register is no longer in use, and refunds must be processed in cash as per Section 142(3) of the Central Goods and Services Tax Act, 2017. The Supreme Court's judgment in Sandoz Private Limited was cited, which concluded that refunds should be in the form of reversal of CENVAT credit or in cash if TED was paid in cash. Conclusion: The High Court disposed of the LPAs, affirming that the issue stands concluded by the Supreme Court's judgment in Sandoz Private Limited. The respondent is entitled to a refund in accordance with the law, considering the provisions of the GST regime.
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