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2018 (10) TMI 483 - HC - Customs100% EOU - reimbursement of central sales tax on goods manufactured in India - it was the case of Revenue that EOU would be entitled to reimbursement of CST in respect of only those purchases made from DTA which are used for production of goods meant for export or utilized for export services. The CST paid on raw materials etc purchased from DTA which are used in manufacture of goods sold in DTA would not be eligible for reimbursement of CST - Interpretation of Foreign Trade Policy. Held that:- The Foreign Trade Policy entitled an EOU to reimbursement of CST on its purchases made from DTA units. This provision did not make any distinction between the consumption of the goods purchased from DTA for production of goods meant for export or for domestic clearances. The Foreign Trade Policy was formulated by the Government of India in exercise of powers under section 5 of the Act. Para. 6.11 of the said policy carries the title “Entitlement for supplies from the DTA”. Though this title would prima facie suggest that para. 6.11 concerns the entitlement of an EOU when the goods are supplied from a DTA, however, as is well settled, a title to a statutory provision or for that matter any other document would not necessarily govern the plain language used therein and can, at best, be used for guidance - Clause (b) of para. 6.11 provides that suppliers of precious and semiprecious stones, synthetic stones and processed pearls from DTA to EOU would be eligible for grant of replenishment authorisations at rates and for specified items. Thus these two clauses (a) and (b) specifically dealt with the supplies made by a DTA to an EOU or other similar units such as EHTP,STP, etc. In contrast clause(c) did not use any expression that the same would be confined to a sale by a DTA unit. Clause (c) starts with the expression “In addition, EOU/EHTP/STP/BTP units shall be entitled to the following”. Subcause (i) of clause(c) provides for reimbursement of Central Sales Tax (CST) on goods manufactured in India. Subclause(ii) provides for exemption from payment of Central Excise Duty on goods procured from DTA on goods manufactured in India. The Hand Book of Procedures and in particular Appendix14-I-I contained therein nowhere aims to lay down any policy but prescribes the procedure to be followed for reimbursement of CST. It is undoubtedly true that para 2 of this Appendix restricts the CST reimbursement on purchases made by an EOU from a DTA unit. However, this restriction in our opinion would run counter to the terms of FTP itself and ultra vires the powers of the Director General of Foreign Trade. The title of the Appendix itself provides that it is a procedure to be followed for reimbursement of Central Sales Tax. Para.1 further clarifies that the procedure given in the said annexure shall be applicable for reimbursement of CST. There is little doubt therefore, that Appendix 14II aimed to lay down the procedure for claiming the benefit. In any case, such procedure could not have restricted the benefit by excluding the purchases from certain source which exclusion did not flow from the Foreign Trade policy itself. Petition allowed - decided in favor of petitioner.
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