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TMI Blog2016 (8) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... nd applications were properly and correctly disallowed. - Decided against the assessee. - WRIT PETITION NO. 2927 OF 2015 & WRIT PETITION NO. 2926 OF 2015 - - - Dated:- 1-8-2016 - S.C. DHARMADHIKARI DR. SHALINI PHANSALKARJOSHI, JJ. Mr. Prakash Shah with Mr. Prasad Paranjape and Mr. Jas Sanghavi i/b M/s. PDS Legal for the Petitioners in both the Writ Petitions. Mr. Anil C. Singh, Additional Solicitor General with Mr. Beni Chatterjee, senior counsel, Mr. Pradeep S. Jetly and Mr. Dhanesh R.Shah i/b Mr. M.S. Bhardwaj for the Respondent in Writ Petition No.2926 of 2015. ORAL JUDGMENT : [Per S.C. Dharmadhikari, J.] 1 These petitions involve common questions of fact and law. They are heard together and are being disposed of by this common judgment. 2 Rule in both the petitions. Respondents waive service. By consent, Rule made returnable forthwith. 3 Since both sides relied on the pleadings in Writ Petition No.2927 of 2015, we would take the facts and events from that petition. 4 The petitioner in this petition claims to be a 100% Export Oriented Unit ( EOU for short) engaged, inter alia, in the manufacture of goods falling unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons with the Development Commissioner (Respondent No.3) claiming refund of the TED paid by the petitioners' DTA unit on the goods supplied to the petitioners EOU. These applications were granted from time to time, except the refund applications dated 20th April, 2012, 29th October, 2012 and 4th April, 2013, involving the period commencing from January, 2012 to December, 2012. It is claimed that all the export documents were supplied along with these applications but the same were rejected on the ground that there is a policy circular dated 15th March, 2013, by which the Director General of Foreign Trade ( DGFT for short - respondent No.2) purported to clarify, inter alia, that no refund of TED should be provided by the Development Commissioners / DGFT as supplies are ab-initio exempted from payment of excise duty. Annexure-E is a copy of this policy circular. 8 From paragraph 15 of the petition, the circular is analysed, but it is urged that the refund applications at the initial stage were not granted. Writ Petition No.9312 of 2013 was filed in this Court to challenge even this policy circular but on 23rd September, 2014, this Court disposed of the writ petition directin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. One of the benefits is the TED refund. Para 8.3.(c) of the FTP covers both TED refund as well as exemption from TED for different types of cases. TED refund is allowed where TED exemption is not available. On one hand the provisions contained in Chapter 8 of the FTP pertains to deemed exports, however, on the other hand there is an exclusive Chapter i.e. Chapter No.6 in the FTP, which is in consonance with the scheme of EOU. Thus the emphasis is that the policy circular has not introduced any new conditions/provisions but it is merely clarificatory. For these and other statements that are set out in this affidavit, it is submitted that the conclusion in the impugned order is correct. Reliance is also placed on CBEC Circular dated 3rd May, 2007, copy of which is annexed as Exhibit-E to the affidavit. 13 The petitioners have filed an affidavit-in-rejoinder and apart from reiterating the arguments in the writ petition so also the grounds thereof, what is urged is that the refund claims in the past have been granted. It is submitted that the recipient EOU with the disclaimer from DTA supplier is entitled to refund of the duty paid by the suppliers in terms of para 8.3 subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be regarded as deemed exports and DTA suppliers shall be eligible for relevant entitlements under Chapter 8 of FTP, besides discharge of export obligations, if any, on the supplier. Notwithstanding the above, EOU / EHTP / STP / BTP units, on production of suitable disclaimer from DTA supplier, are eligible for obtaining entitlement specified in chapter 8 of the FTP. For claiming deemed export duty drawback, they shall get brand rates fixed by the Development Commissioner wherever all industry rates of drawback are not available. Mr. Shah relies upon the language of paras 8.3 and 8.5 of the FTP to submit that the same permits refund of TED except supplies made against ICB. He would submit that on a combined reading of para 6.11 together with para 8.3 and 8.5, an EOU with the disclaimer of the DTA supplier is eligible to refund of terminal duty. The EOU cannot be denied the refund of TED on the ground that the goods can be procured without payment of duty. 16 Mr. Shah then submits that in any event, the respondents cannot deviate from the past and consistent practice of granting refund of TED on goods supplied to EOU. He relied upon the several orders passed in that beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made the basis for claim of refund of TED. This is a clear modus operandi and which stands exposed. There is nothing additional but the reasons which have already been assigned in the impugned order are merely explained in the affidavit. It is not an attempt to supply additional reasons nor is it an attempt to get over something which binds the respondents. Once the policy circular was issued and it is merely clarificatory, then, neither the earlier orders of refund nor the judgment of the Delhi High Court would govern the controversy and can be of any assistance to the petitioners. For these reasons it is submitted that the petition be dismissed. 21 For properly appreciating the rival contentions, we would make a reference to the FTDR Act. The FTDR Act, 1992 is an Act to provide for the development and regulation of foreign trade by facilitating imports into and augmenting exports from India and for matters connected thereto or incidental therewith. Chapter 1 of this Act contains the preliminary provisions in which appears section 2 titled 'Definitions'. After defining the relevant terms, including the words import and export what is then pointed out is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment in the formulation of the FTP and he shall be responsible for carrying out that policy. 24 The Central Government may, by order published in the Official Gazette, direct that any power exercisable by it under the FTDR other than the powers under sections 3, 5, 16 and 19 may also be prescribed in such cases and subject to such conditions by the Director General or such other officer subordinate to the Director General as may be specified in the order. 25 We need not refer to any judgment once the statutory scheme is clear. The power to make and amend the FTP vests exclusively with the Central Government. The Director General and others would be responsible for carrying out that policy. It is undisputed before us that he can interpret the said policy or any of such stipulations in the nature thereof during the course of its implementation. 26 For the present proceedings Chapter VI and VIII of the FTP are relevant. They have been compiled for our benefit by the petitioners' counsel. 27 Chapter VI of the FTP 2009-2014 deals with EOUs, Electronics, Hardware, Technology Parks etc. Para 6.1 deals with Eligibility. Units undertaking to export their entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supplier. Notwithstanding the above, EOU/EHTP/STP/BTP units shall, on production of a suitable disclaimer from DTA supplier, be eligible for obtaining entitlements specified in chapter 8 of FTP. For claiming deemed export duty drawback, they shall get brand rates fixed by DC wherever All Industry Rates of Drawback are not available. 29 From a reading thereof, it is apparent that supplies from DTA to EOU units will be regarded as deemed exports and DTA supplier shall be eligible for relevant entitlements under chapter 8 of FTP, besides discharge of export obligation, if any, on the supplier. Notwithstanding the above, EOU/EHTP/STP/BTP units shall, on production of a suitable disclaimer from DTA supplier, be eligible for obtaining entitlements specified in chapter 8 of FTP. For claiming deemed export duty drawback is something which is also referred to in this para / clause. 30 Then, our attention is invited to Chapter 8 which deals with deemed exports. Para 8.1 of this chapter deals with deemed exports. It defines them to mean those transactions in which goods supplied do not leave the country and payment for such supplies is received either in Indian rupees or free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be available for supplies made by an Advanced Authorisation holder to manufacturer holder another Advance Authorisation if such manufacturer, in turn, supplies the product(s) to an ultimate exporter. Amended Paragraph 8.3(c) Refund of terminal excise duty will be given if exemption is not available. Exemption from TED is available to the following categories of supplies : (i) Supplies against ICB; (ii) Supplies of intermediate goods, against invalidation letter, made by an Advance Authorisation holder; and (iii) Supplies of goods by DTA unit to EOU/EHTP/STP/BTP unit. Thus such categories of supply which are exempt ab initio will not be eligible to receive refund of TED. 34 Mr. Shah submits that the subject of this circular is amendment in para 8.3(c) and para 8.4 of the FTP pertaining to deemed export scheme. Thus he would submit that this is an amendment of the FTP by the Government of India and the power conferred by sections 3 and 5 of the FTDR Act has been exercised in this case. The existing paragraph 8.3(c) was dealing with exemption from TED where supplies are made against ICB and in other cases refund of TED will be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the averments in the counter affidavit as well as a letter addressed by the third respondent on 31st May, 2013, directing consequential instructions to be issued to field formations in the light of the amended circular dated 15th March, 2013. The argument was that in case the petitioner wishes to seek refund, the relevant statutory regime would be under the control of the Central Excise Act. Then, the policy stipulations are referred in paragraphs 5, 6, and 7 and in paragraph 8, the Division Bench held that in the case before it, the petitioners did not make any supplies against international competitive bidding. The supplies made to the EOU were entitled to be regarded as deemed exports. The petitioners did not make any supplies against ICD and, therefore, its case would be covered by para 8.3 (c), i.e. in which refund of TED will be given. The Division Bench in paragraph 9 held that the respondents passed an adverse order on the footing that some clarification was given by the Policy Interpretation Committee in its meeting of 4th December, 2012. The reasoning appears to have prevailed with the Policy Interpretation Committee, but the Court was unable to comprehend the rationale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the petitioners are not claiming or availing cenvat credit of duty paid by DTA unit under the provisions of the Cenvat Credit Rules, 2004. The DTA unit did not claim the benefit of the TED refund. The petitioners were regularly filing applications with the Development Commissioner claiming refund of TED paid by the DTA of the goods supplied to them. Previously all such refund claims were sanctioned. The petitioners' assertion was that the TED refund claims were filed before the issuance of the policy circular dated 15th March/18th April, 2013. In any event, the policy circular cannot apply to the claim filed for the period prior thereto and it cannot be given retrospective effect as FTP 2009-2014 published on 18th April, 2013, has not amended the relevant provision. Reliance was placed before us on that further stipulation. We are not concerned with this for the simple reason that we are dealing with an issue whether this policy circular operates and governs the refund claims in question. Relying upon the stipulations in the FTP the petitioners contended that the supplied goods to EOU is deemed export and is eligible for refund. The impugned circular does not dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sofar as the subject issue is concerned, all that the respondents have done is to clarify that para 8.3(c) and para 6.2(b) and 6.11(c)(ii) of the FTP read harmoniously and together imply that no refund on supplies under para 8.3 is admissible. When there is an exemption, then, this refund claim was rightly disallowed. We do not think that any individual decision and in the case of a distinct assessee would, therefore, be of assistance to the present petitioners. 42 Though in the past such claims have been granted does not mean that the practice or the past orders should govern the issue necessarily. When the petitioners themselves were aware of a policy circular and sought to urge that it would not be governing the controversy and for the period for which refund is claimed, then, it is clear that they were required to overcome the said stipulations and the circular itself. That having found rightly to be clarifying the obvious position, we have no hesitation in concluding that the refund applications were properly and correctly disallowed. 43 As a result of the above discussion, both the writ petitions fail. Rule is discharged therein. There shall be no order as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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