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TMI Blog2018 (1) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuaded to accept the policy circular issued by the DGFT (Policy Circular No. 16 (RE-2012/2009-14) dated 15.03.2013) seeking to clarify that no refund of TED should be provided in cases where the supplies of goods are ab initio exempted from payment of excise duty, is binding. The same is clearly beyond the powers of the DGFT - the DGFT is appointed for the purposes of the Act and is responsible for carrying out the export-import policy that may be formulated by the Central Government. The role of the DGFT is limited to advising the Central Government in formulation of the export import policy and to exercise certain other powers of the Central Government, which are exercisable under the Act. However, that does not include the power to either frame or amend the FTP. The impugned orders/communications - orders dated 05.06.2013, 23.01.2014 and 28.08.2014 - rejecting the petitioner’s claim for refund of TED in respect of the goods supplied between January, 2012 and 17.04.2013 on the ground that the said goods were exempted from excise duty, are set aside - petition allowed. - W.P.(C) 5935/2017 & CM No.42082/2017 - - - Dated:- 19-1-2018 - MR VIBHU BAKHRU J. Advocates who app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above named EOUs did not provide CT-3 certificates to the petitioner. 5.2 According to the petitioner, it was permisible to supply the goods on payment of TED and subsequently claim refund. Accordingly, the petitioner applied for refund of TED aggregating ₹67,18,748/- in respect of goods supplied during the period January, 2012 to 17.04.2013. The said claim was rejected by the Joint Director General of Foreign Trade (respondent no.3) on 05.06.2013 with the endorsement - as supply is made to 100% EOU, TED is not admissible in terms of policy circular dated 15.03.2013 . 5.3 In the meanwhile, on 18.04.2013, the Central Government (respondent no.1) published Notification No. 4 (RE-2013)/2009-2014 in exercise of powers conferred by Section 5 of the Foreign Trade (Development Regulation) Act, 1992 (hereafter the Act ) amending the FTP by substituting paragraphs 8.3(c) and 8.4 of the FTP. 5.4 Thereafter, the petitioner resubmitted its claim for refund of TED relying on the judgment in Kandoi Metal Powders Mfg. Co. Pvt. Ltd. v. Union of India Ors: 2014 (302) E.L.T. 209 (Del.) , which was delivered by the Division Bench of this Court on 11.02.2014. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said notification is set out below:- 2. The existing paragraphs 8.3 (c) and 8.4 in the FTP are substituted by amended paragraphs 8.3(c) and 8.4 as given below: (i) Existing Paragraph 8.3 (c) Exemption from terminal excise duty where supplies are made against ICB. In other cases, refund of terminal excise duty will be given. Exemption from TED shall also be available for supplies made by an Advance Authorisation holder to a manufacturer holding 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 to another 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. (ii) Existing Paragraph 8.4 Following table show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, if ICB. Refund, if without ICB. (h) No Yes Refund (i) Yes Yes No (j) Yes Yes Refund 8. The respondents contend that the aforementioned notification was only clarificatory and it was never the intention of the Central Government to allow refund of TED on goods supplied to EOUs that was exempt from charge of excise duty. The said contention is unpersuasive. First of all, the tenor of the notification dated 18.04.2013 does not indicate that it is clarificatory; on the contrary, it expressly provides that the notification is being issued in exercise of powers conferred under Section 5 of the Act to make the amendments in the FTP. Secondly, there was no ambiguity in Paragraph 8.3(c) of the FTP (prior to the amendment). It expressly provided that exemption of TED would be available for supplies made against ICD (International Competitive Bidding) and in other cases refund of terminal excise duty will be given . Thus, the Central Government had clearly indicated ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o accept the policy circular issued by the DGFT (Policy Circular No. 16 (RE-2012/2009-14) dated 15.03.2013) seeking to clarify that no refund of TED should be provided in cases where the supplies of goods are ab initio exempted from payment of excise duty, is binding. The same is clearly beyond the powers of the DGFT. 13. Section 6 of the Act provides for appointment and functions of the DGFT and is set out below:- 6. Appointment of Director General and his functions. (1) The Central Government may appoint any person to be the Director-General of Foreign Trade for the purposes of this Act. (2) The Director-General shall advise the Central Government in the formulation of the export and import policy and shall be responsible for carrying out that policy. (3) The Central Government may, by Order published in the Official Gazette direct that any power exercisable by it under this Act (other than the powers under sections 3, 5, 15, 16 and 19) may also be exercised, 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. 14. It is thus seen that the DG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of, (i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or (ii) service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification: Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under sub-section (5) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure under the Hand Book of Procedures. The court further held that In case of refund of terminal excise duty, the concerned authority is DGFT to whom petition has been moved for refund of terminal excise duty. Therefore, there s no question to approach the excise department for refund of any excice duty . 22. Mr. Narula s contention that the said decision did not refer to the policy circular dated 15.03.2013 and, therefore, ought to distinguished cannot be accepted. A plain reading of the said decision indicates that the Division Bench had taken note of the policy circular dated 15.03.2013. More importantly, the reasons as indicated in the said circular were rejected. The relevant extract of the said decision is as under:- 9. The authorities in this case appear to have proceeded to make an order adverse to the petitioner and proceeded to hold that the petitioner was disentitled to the benefit of refund in view of some clarification given by the Policy Interpretation Committee, in its meeting of 04.12.2012 to the effect that refund of CENVAT credit provisions are available under Excise rules and CENVAT rules which should be availed of rather than claiming refund . T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rificatory and the DGFT had the power to interpret and implement the policy. This is different from the view of this Court in Kandoi Metal Powders Mfg. Co. Pvt. Ltd. (supra), wherein the Court had opined that Cenvat regime under Central Excise operates in its own terms and is independent of the rights and liabilities of the parties under the FTP. This Court is also unable to concur with the view of the Bombay High Court that the Policy Circular dated 15.03.2013 clarifies an obvious position. Plainly, in such case, there was no requirement to amend the FTP. 24. Mr. Narula had also referred to the decision of the Division Bench of this Court in Union of India and Ors. v. Alstom India Limited: 2015 (325) ELT 72 (Del) and on the strength of the said decision contended that the Division Bench had not accepted the earlier decision in Kandoi Metal Powders Mfg. Co. Pvt. Ltd. (supra). He further stated that the Court had set aside the observations of the learned Single Judge directing the authorities to examine the case of the Alstom India Ltd. keeping in mind certain observations and the judgment of this Court in Kandoi Metal Powders MFG. Co. Pvt. Ltd. (supra), and there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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