9911796707
TMI Blog2001 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... he Director General of Foreign Trade (hereinafter referred to as DGFT) on the strength of which it can import various specified items including refractory items from abroad free of Customs Duty. Instead of importing such items from abroad it has chosen to procure such items from the petitioner who is the holder of an Advance Intermediate Licence under the Import Policy. The items manufactured by the petitioners are in the normal course subject to Central Excise Duty under the Excise Law. However, since the supply of the said items by the petitioner to VSP constitutes "Deemed Export" within the meaning of the Import Policy the petitioner is entitled to certain benefits under the Policy. One of such benefits is refund of terminal Excise Duty under the Policy. So the petitioner duly applied for such refund of terminal Excise Duty from the DGFT being the respondent No. 2 herein and previously got refund for the quarters ending March 1994, June 1994 and September 1994. However, this time the DGFT refused to entertain demand of refund for the succeeding quarters. The DGFT is of the view that the petitioner was entitled to ab initio exemption of Excise Duty under Rule 13 of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Policy have been framed under Section 5 of the Foreign Trade (Development Regulation) Act, 1992. Therefore, the aforesaid Policy has got the statutory force. 6.Paragraph 3 of the Handbook of Procedures (both 1994-95, 1995-96) provided that the Handbook is to implement the provisions of Foreign Trade (Development Regulation) Act, 1992, the Rules and Orders made thereunder and the Export and Import Policy 1992-97. According to him, the purpose of Handbook is to implement the Policy, which confers a substantive right and it cannot be taken away by the Procedure namely the Handbook. He draws an analogy of the provision of particular Rule vis-a-vis concerned Act. It is settled law that the Rule cannot override the provision of the Act under which the Rule is framed; therefore, the Policy framed under the aforesaid Act cannot be overridden by the Provision of the Handbook. In this connection he refers to a Supreme Court Judgment reported in 82 ITR 44 (1971). So, the basis of rejection of the petitioners' claim by the DGFT, because of no provision being made in the Handbook, should not be upheld by this Court. It is clear from the Policy which is to be considered and read alone no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection he has referred to a decision of the Supreme Court reported in 1997 (92) E.L.T. 13 (S.C.). 12He contends that. as far as the decision of Excise authorities are concerned it was rendered holding the petitioners' supplies were not raw materials nor intermediate goods and the Excise authority did not decide the question of refund but question of exemption of payment of Excise Duty before removal of the goods. Here is a question of refund of Excise Duty and not a question of exemption. So the decision of the Excise Authority has no bearing in this particular case. 13.As far as the question of jurisdiction is concerned this Court has got jurisdiction as the impugned order of the DGFT was passed pursuant to the Order of this Court and, in fact, petitioners sought to prefer an appeal against the aforesaid decision, it was not entertained as impugned order was passed pursuant to direction of this Hon'ble Court. Therefore, irrespective of the question of accrual of causes of action in relation to jurisdiction, this Court is the only forum where the petitioners should approach. Moreover, refund is to be made to the petitioners at its place of business situate within the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials in terms of the said exemption Notification No. 49/94 dated 22nd September, 1994 under Rule 191BB. 18.The period of dispute is from October 1994 till June 1995. The Central Excise Rule 191BB was omitted with effect from 1st October, 1994 by Notification No. 40/94-C.E. (N.T.), dated 22nd September, 1994 and the new exemption Notification No. 49/94-C.E. (N.T.), dated 22nd September, 1994 made in exercise of power under Rule 13 of the Central Excise Rules, 1944. Under this notification the writ petitioner was entitled to exemption from payment of duty as he was holder of Advance Intermediate Licence supplying goods to V.S.P. who is a holder of Duty Excise Entitlement Certificate and Advance Intermediate Licence in respect thereof. 19.It is significant that the writ petitioner has not made any application for exemption from payment of duty under the Notification No. 49/94 made in exercise of power under Rule 13 of the Central Excise Rules. The writ petitioner not having applied for the benefit of the exemption of payment of Central Excise Duty under the said Notification No. 49/94 dated 22nd September, 1994 and without proceeding against Central Excise Authorities for refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g are the admitted position: - (i) The petitioner is holder of advance intermediate licence which was issued for supply of various refractories items to the advance licence holder, viz., Vishakhapatnam Steel Plant for import of inputs for making export products. The refractories items were required for producing non-alloy steel bar for export. (ii) The petitioners supplied the aforesaid input goods against the licences, viz., advance licence issued under the duty exemption scheme. So the aforesaid supply is regarded as deemed exports under this policy. (iii) The petitioner has paid necessary Central Excise Duty for removal of goods from its factory to the aforesaid exporter. 25.Under the aforesaid admitted positions the petitioner contends that it is entitled to the benefit for deemed exports as mentioned in paragraph 122 of the Export and Import Policy covering 1st April, 1992 to 31st March, 1997. The outstanding claim for refund of terminal Excise Duty relates to the period from October, 1994 to June, 1995. 26.It appears that respondent No. 2 has rejected the claim principally on three grounds, viz., (i) under paragraph 197 of the Handbook of Proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any duty for import of input materials to be used in production of export materials on certain terms and conditions and for this purpose advance licence is issued to the prospective exporters. However, if there be any indigenous supplier of the inputs as substitute of imported variety then it would be open for the exporters to procure the same from indigenous sources. In that case the advance licences are to be surrendered and/or cancelled to the extent of quantity of the input materials from indigenous sources. The indigenous supplier in such case is entitled to get benefits either by way of exemption from payment of Excise Duty or to get refund of Excise Duty if already paid. These indigenous suppliers are provided with amongst other advance intermediate licence or advance release order. Therefore, the whole object is that the exporters should get duty free input for production of export materials. In the event there being collection and/or procurement from indigenous sources then exporter is inevitably bound to pay under general law necessary Excise Duty as the incidence of which is bound to be shifted to it. As such the scheme has been formulated under the Exim Policy either t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, from the materials I find the exporter VSP itself at certain point of time had to pay the Excise Duty for supply of the same goods made by the writ petitioner. As I have already observed in order to get removal of the goods without payment of Excise Duty there are 13 pre-conditions to be fulfilled. In this case I do not find any of the pre-conditions having been fulfilled. So the respondent No. 2 has wrongly held that the petitioner was entitled to the exemption contrary to what has been decided by the Excise Authority. The decision of the Excise Authority cannot be upset by the DGFT for which he has not been conferred with power in order to defeat the claim of the writ petitioner. Factually the petitioner has paid Excise Duty, whether rightly or wrongly, is not the question here. The question involves in this case is entitlement of refund of terminal Excise Duty. The respondent No. 2 should have proceeded in this direction. 32.I find from Chapter X of Exim Policy covering from 1st April, 1992 to 31st March, 1997 in its paragraph 122 that - Deemed exports shall be eligible for the following benefits in respect of manufacture and supply of goods qualifying as deemed ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act or whittle down its effect." 35.In this case though it is true that there is no expressed procedure for granting benefit in the Handbook of Procedures but this cannot take away petitioner's right granted under aforesaid Exim Policy. Nowhere in the Handbook of the Procedure provides not to grant such benefit. Therefore the respondent No. 2 should have considered this matter in this angle. Even if it is assumed that the writ petitioner is entitled to get benefit of exemption then there cannot be any legitimate bar against the petitioner applying for getting benefit of deemed exports. It would be the option of the petitioner to take advantage of any law particularly, which is more beneficial. This view of mine finds support of law settled by the Supreme Court while deciding the case of Collector of Central Excise, Baroda v. Indian Petro Chemicals reported in 1997 (92) E.L.T. 13 (S.C.) cited by Mr. Banerjee. This judgment has laid down as follows : - "We have read the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal under appeal. It came to the conclusion that two exemption notifications were applicable and gave to the assessee the benefit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
