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2016 (10) TMI 379 - CALCUTTA HIGH COURTFTP 2009-14 - Sec. 5 of the Foreign Trade (Development Regulation) Act, 1992 - denial of exemption of additional customs duty - extension of validity period of DFIA licences - transferibility of DFIA licences on fulfillment of export obligation - whether DGFT was justified in withdrawing the benefit of exemption from payment of additional customs duty in respect of 13 DFIAs? - inordinate delay in endorsing transferability - principles of natural justice - availability of cenvat credit - eligibility of benefit of exemption when the manufacturers avail the cenvat credit and not the assessee - interpretation of statute which provides benefit of exemption and CENVAT credit. Held that: - It is trite law that in interpreting a taxing provision of law, if two interpretations are possible, the one that favours the assessee must be preferred. If on the basis of a provision of law, an authority imposes a liability on a citizen or proposes to withdraw a benefit already granted, that provision of law must be strictly interpreted against the authority and so far as possible in favour of a party who would be affected by the imposition of liability or withdrawal of benefit. Authorities for this proposition are legion. The idea of such exemption is to give an incentive to exporters to boost exports which in turn enhances the foreign exchange reserve of the country. If such exporter has not availed of the Cenvat facility, then it cannot be deprived of the benefit of exemption from payment of additional customs duty just because the manufacturer of the export product has availed of the Cenvat facility. That would, in my opinion, be contrary to the spirit and intent of the Policy. It is not disputed that SESA has purchased the export goods upon full payment of excise duty and in any event, the question of double benefit can arise only if the same entity avails of the same benefit twice. Such is not the case here. The manufacturer of the export products and SESA are two distinct entities and any Cenvat facility availed of by the manufacturer cannot be said to be a benefit reaped by SESA. The direction of DGFT Authorities on the Customs Authorities not to allow exemption of additional customs duty to SESA or to the transferees of the licenses in question is erroneous and not sustainable. Before depriving or divesting a citizen of valuable property, the State or a statutory authority must give an adequate and meaningful opportunity of hearing to that party. It is settled law that any order passed or action taken by any party in breach of an order of court is illegal. Such order or action can neither impose a liability on a party nor withdraw a benefit which had been extended to the party earlier. The respondent authorities directed to suitably extend the validity of the DFIA licences in question. Such extension should be for a reasonable period, for a period of not less than 3 months from the date of extension - petition disposed off - decided in favor of petitioner.
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