TMI Blog2014 (4) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... , the very fact that the Foreign Trade Policy had to be amended in June, 2012 to introduce specific provisions for exclusion of cement and steel makes it clear that cement and steel were included prior to the amendment in June, 2012. - The petitioner shall not be required to pay back the deemed export benefit received in the form of refund of Terminal Excise Duty paid by the petitioner on steel and cement supplied to the concerned projects. - Decided in favour of assessee. - W.P. No. 18151 (W) of 2012 - - - Dated:- 30-4-2014 - Indira Banerjee, J. Dr. Samir Chakraborty Shri Abhijit Biswas, for the Petitioner. Shri Pradip Tarafdar Utpal Maitra, for the Respondent. JUDGMENT In this writ application, the petitioner, a public sector undertaking of the Government of India, has challenged the validity and legality of the decisions dated 15 March, 2011 and 9 September, 2011 of the respondent No. 5, to the extent that the respondent No. 5 has held that cement and steel are not eligible for deemed export benefits, except in respect of supplies provided under Paragraph 8.2(d) of the Foreign Trade Policy 2009-14. 2. The petitioner has also challenged notices dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Directorate General of Foreign Trade and the same was placed before the Policy Interpretation Committee headed by the Director General of Foreign Trade, wherein representatives of the Ministry of Power were present and consulted. According to the respondents, the cases related to deemed export benefits for supply of fuel, cement, steel, etc., was discussed. 8. According to the respondents, the policy permits free fuel only under EOU/SEZ/Advance Authorisation Scheme. In no other case, supply of fuel is eligible for deemed export benefit. Similarly, except as provided under Paragraph 8.2(d) of the Foreign Trade Policy, the supply of cement and steel would not be eligible for Deemed Export Benefit. 9. Chapter 8 of the Foreign Trade Policy provides for Deemed Export Benefits. What is meant by deemed export is defined in Paragraph 8.1 whereas Paragraph 8.2 specifies the categories of supply of goods, which are to be regarded as deemed exports under the Foreign Trade Policy if they are manufactured in India. In terms of Paragraph 8.2(g) supply of goods to power projects and refineries are to be regarded as deemed exports. 10. Paragraph 8.3 provides for benefits available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 801 of the Customs Tariff. 13. Benefit of deemed export is also available for renovation and complete modernisation of power plants. The supplier is eligible for benefits listed in Paragraph 8.3(a) and (b) of the Foreign Trade Policy, whichever is applicable. However, supply of goods for setting up any mega power project, as specified in Serial No. 400 of DoR Notification No. 21/2002-Customs, dated 1-3-2002, as amended, are eligible for deemed export benefits as mentioned in Paragraph 8.3(a), (b) or (c) of the Foreign Trade Policy, whichever is applicable, if such mega power project complies with the threshold generation capacity specified in the said Customs notification. 14. Sl. No. 400 of Notification No. 21/2002-Cus., dated 1-3-2002, as amended, reads as under : Sl. No. Chapter or Heading No. or sub-heading No. Description of goods Stand-ard rate Additional duty rate Condition No. (1) (2) (3) (4) (5) (6) 400 9801 Goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of the goods specified above provided that such spare parts, raw materials or consumable stores are essential for the maintenance of the plant or project mentioned in (1) to (5) above. 15. There can be no dispute that the entire scheme of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as the Foreign Trade Act) as also Foreign Trade Policy and Handbook of Procedures, Vols. 1 and 2 should be taken into account as argued by Mr. Tarafdar. 16. Mr. Tarafdar rightly argued that Section 3 of the Foreign Trade Act enables the Central Government to make provisions for the development and regulation of Foreign Trade by facilitating imports and increasing exports. There can also be no dispute that any policy framed in exercise of power under Section 3(1) must be so interpreted as to further the intention of the Legislature. 17. Under Section 3(2) the Central Government is empowered to issue orders prohibiting, restricting or otherwise regulating in all cases, or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power to amend, as argued by Dr. Chakraborty. This is made clear not only by Section 6(3) read with Section 5 of the Foreign Trade Act but also Paragraph 1.3 of the Foreign Trade Policy, which makes it clear that only the Central Government reserves right in public interest to make any amendments, by notification, to the Foreign Trade Policy, in exercise of powers conferred by Section 5 of the Act. The Central Government, while amending Para 8.4.4(iv) of FTP of 2009-14 by Notification No. 92 (RE-2010)/2009-14, dated December 28, 2011, retained the part of the said clause (iv) relating to supply of goods required for setting up of a mega power project exactly in the same way as it stood before the amendment. Dr. Chakravarty rightly argued that this clearly negates the interpretation of respondent No. 5 as contained in the said purported decisions as regards deemed export benefit availability in respect of cement and steel supplied to mega power projects. 23. As a matter of fact, it was only on June 5, 2012, that the Central Government amended the Foreign Trade Policy of 2009-14, by introducing Paragraphs 8.8.1 and 8.8.2, excluding cement and steel from deemed export benefits, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia, refers to mega power project which : (a) is certified by an officer not below the rank of the Joint Secretary to the Government of India in the Ministry of Power; (b) is an inter-State thermal power plant of a capacity of 700 MW or more, if located in the States of Jammu and Kashmir, Sikkim, Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura; (c) is an inter-State thermal power plant of a capacity of 1000 MW or more, if located in other States. 29. There is no dispute that all these three requirements are satisfied in the instant case. There is also no dispute that the power projects are covered by Chapter sub-heading 9801 of the Customs Tariff. 30. As argued by Dr. Chakraborty, there is no requirement in Paragraph 8.4.4(iv) that the goods to be supplied have to be those specified under Chapter sub-heading 9801 of the Customs Tariff. In the absence of such requirement, no such condition can be imported in clause (iv) of Paragraph 8.4.4. 31. Chapter Heading 9801 makes it apparent that goods covered thereunder include, disjunctively, raw materials for manufacture of all items of machinery, etc., specified therein w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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