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2016 (12) TMI 77 - HC - CustomsDenial of the benefit of refund of terminal excise duty in relation to capital goods supplied to power projects - vires of of the Foreign Trade (Development and Regulation) Act, 1992 - Held that: - It is quite clear that firstly the eligibility called entitlement by the petitioner to the refund and terminal duty as a deemed export benefit was introduced for the first time through an amendment of the Hand Book of Procedures. Thus, the question of its being ultra vires the Act or the Policy would not arise. Secondly, paragraph 10.11 which spelt out the eligibility to receive refund of terminal excise duty itself established the linkage i.e. payment of excise duty as an existing condition and further restricted the quantum to 3%. In this case, the question is whether the withdrawal of benefit under 10.3, i.e., of refund of terminal excise duty is arbitrary or violates the principle of promissory estoppel. As noticed earlier, the linkage between payment of excise by the supplier and entitlement of the deemed export for duty refund was clearly established even before the entering into of contractual bargain and issuance of the letter of intent. In other words when the petitioner issued the letter of intent on 26.4.1999, it was fully aware of the fact that the benefit was introduced on 22.4.1999 and further that this was conditioned upon the existence of the excise duty incidence that could be refunded to the tune of 3% - if any additional custom duty was imposed, the terminal excise duty refund had to be denied. The Committee was informed by the Department of Revenue that in the power sector, countervailing duty had been increased from 0 to 16 % and, therefore, terminal excise duty could not be given. In the present case, therefore, since there was a justification and even a strong public interest element in the denial of terminal excise duty benefits, the question of its being arbitrary does not arise. This Court is of the opinion that since the duty refund eligibility was linked to the payment of duty, to offset the competitive additions that imported goods would have over domestically manufactured ones, the parity achieved by another policy compelled the government to amend the Hand Book of Procedures in the manner it did. There is clearly neither any arbitrariness nor violation of doctrine of promissory estoppel - petition dismissed.
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