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2018 (9) TMI 1737 - HC - CustomsRefund of Customs Duty - transfer of Duty Free Import Authorization (DFIA) Licence - petitioner sought refund of the duties paid by the transferee - Held that - Under the DFIA Scheme, it is inferred that once the license is transferred to a third party legitimately, the benefits accrued under the license on the transferor terminates. The respondents have rightly rejected the claim of the petitioner - petition dismissed.
Issues:
Challenge to order for refund under Duty Free Import Authorization scheme. Analysis: The petitioner, a manufacturer and exporter of polypropylene mats, exported goods under Duty Free Import Authorization (DFIA) scheme. The petitioner transferred the DFIA license to another entity, which imported goods and paid additional customs duty. The petitioner sought a refund of the duty paid by the transferee, which was rejected by the authorities. The petitioner argued that the Foreign Trade Policy allows reimbursement of duty paid by the importer to the exporter as drawback. The respondents contended that duty drawback is restricted to the credit already availed, and since the petitioner did not provide evidence that the importer did not avail Cenvat Credit, the refund was denied. The High Court examined the provisions of the Foreign Trade Policy and the Customs, Central Excise Duties and Service Tax Drawback Rules. It was noted that the policy allows reimbursement of additional customs duty paid by the importer to the exporter as drawback. However, the Rules restrict duty drawback to the credit already availed. The Court observed that the petitioner did not provide evidence to show that the importer did not avail Cenvat Credit, as required by the Rules. The Court concluded that once the DFIA license is transferred legitimately, the benefits accrued under the license on the transferor cease, and upheld the rejection of the refund claim. In light of the above analysis, the High Court dismissed the writ petition, finding no merit in the petitioner's arguments.
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