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2015 (8) TMI 292 - DELHI HIGH COURT

2015 (8) TMI 292 - DELHI HIGH COURT - 2015 (325) E.L.T. 72 (Del.) - Refund of terminal excise duty already paid – Goods supplied against International competitive bidding – Held that:- As per Entry 91 of Notification, 2006 and Para 8.3 of Foreign trade policy, all goods supplied against International Competitive Bidding (ICB) were exempted from duty of excise – Petitioner had paid excise duty and thereafter made claim for refund of excise duty paid – Procedure adopted by Single Judge was fallaci .....

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vailing CENVAT Credit Account in terms of CENVAT Credit Rules, 2004 – Impugned orders hereby set aside –DGFT to consider application of respondent for refund in terms of provisions of FTP, 2009-2014 – Appeals disposed off – Decided against Revenue. - LPA No. 192/2015, LPA No. 196/2015 - Dated:- 28-7-2015 - G. Rohini, CJ And Jayant Nath,JJ. For the Petitioner : Mr. Sanjay Jain, ASG with Mr. Sanjeev Narula, CGSC, Mr. Ajay Kalra, Adv For the Respondent : Mr. Sujit Ghosh with Ms. Kanupriya Bhargava .....

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writ petitioner") filed W.P. No. 1331/2015 pleading that M/s National Thermal Power Corporation (NTPC) which is engaged in the project of setting up a Super Thermal Power Projectin the State of Bihar awarded a contract to BHEL for the supply of steam generated package by following the procedure of International Competitive Bidding (ICB) and that the writ petitioner being a sub-contractor of BHEL supplied boiler components during the period from 23.09.2010 to 31.01.2011 to NTPC on payment of .....

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suitable order within two weeks in the light of the observations made therein. 3. In pursuance thereof, DGFT passed an order dated 24.02.2015 rejecting the refund claim of TED of the writ petitioner. The said order dated 24.02.2015 was challenged by the writ petitioner by filing W.P. No. 2344/2015 and the same was disposed of by the learned Single Judge by order dated 11.03.2015 thereby setting aside the order dated 24.02.2015 and directing the respondents to refund the TED to the writ petitione .....

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he Central Excise Act, 1944 (for short "the Act") empowers the Central Government to grant exemption from duty of excise either absolutely or subject to such conditions as may be specified. In exercise of the powers conferred under Section 5A of the Act, the Central Government issued the Notification dated 01.03.2006. As per Entry 91 of the said Notification, all goods supplied against International Competitive Bidding (ICB) are exempted from duty of excise. 7. That apart, Export and I .....

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ertain fiscal benefits. As per Paragraph 8.2(g) of the Foreign Trade Policy (FTP), the supply of goods to power projects and refineries under procedure for International Competitive Bidding are qualified as deemed export . Paragraph 8.3 of FTP provides for various benefits available to the deemed exports including exemption from Terminal Excise Duty (TED) where supplies are made against International Competitive Bidding (ICB) vide Clause (c) of Paragraph 8.3. It also provides for refund of termi .....

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8. It is not in dispute that the supplies made by the writ petitioner to NTPC were under ICB and therefore the supplies are exempted from payment of TED. However, the writ petitioner had paid the excise duty and thereafter made a claim for refund of the excise duty paid. The application for refund was purportedly filed under Paragraph 8.3(c) of the FTP, 2009-2014. 9. W.P. No.1331/2015 was filed on the basis of certain file notings made on the application of the writ petitioner to the effect tha .....

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Judge disposed of the writ petition with a direction to DGFT to pass a suitable order within two weeks. However, certain observations were made by the learned Single Judge in Paragraphs 16 and 17 of the order with regard to the rival contentions of the parties and in Paragraph 19 Zonal DGFT was directed to examine the case of the writ petitioner keeping in mind the said observations and the judgment of this Court titled Kondoi Metal Powders Mfg. Pvt. Ltd. v. Union of India & Ors., W.P.(C) NO .....

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rpretation of the FTP. The FTP, according to me, is clear, that where exemption has been availed of, no refund is payable to such an applicant. 17. As indicated above, the common case of parties before me, is that, exemption was not availed of by the petitioner, instead the petitioner ended paying TED. Therefore, the petitioner had two options: First, to seek refund of the Excise Duty from the Excise Department. Second to seek refund from the respondent herein. The petitioner has chosen the latt .....

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t in W.P. No.1331/2015, DGFT passed the order dated 24.02.2015 rejecting the claim of the writ petitioner for refund of the TED stating that in view of the amended FTP exempted categories of supplies are not eligible for refund of the TED paid. Challenging the said order, the writ petitioner filed W.P. No.2344/2015 and the learned Single Judge by order dated 11.03.2015 set aside the rejection order dated 24.02.2015 and directed refund of TED to the writ petitioner within two weeks. 11. It is sub .....

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. In other words, the contention of the learned ASG is that it is not permissible to an exporter who paid the TED for supplies made against ICB to claim refund by making an application under Paragraph 8.3(c) of FTP. 12. Pointing out that the writ petitioner had paid the excise duty through CENVAT Credit Account, the learned ASG vehemently contended that the refund sought to be claimed by the petitioner under FTP is to circumvent the provisions of CENVAT Credit Rules, 2004. He also submitted that .....

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sible under law since the respondent had paid the excise duty through CENVAT Credit, were urged in the writ proceedings before the learned Single Judge nor before the statutory authorities before whom the claim for refund was made by the writ petitioner. It is also contended that in the light of the specific finding recorded by the learned Single Judge that the petitioner who had not availed of exemption from TED is entitled for refund, it is not permissible for the appellants to go beyond the s .....

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nce Co. Ltd. v. Smt.Saroj & Ors. (2009) 13 SCC 508; Kadi Municipality v. New Chhotalal Mills Company Ltd. AIR 1965 Guj. 293; M.S.Gill v. Chief Election Commissioner, (1978) 1 SCC 405; Gem Sanitary Appliances Pvt. Ltd. v. Chief Commissioner Income Tax Delhi - IV & Ors. (2012) 342 ITR 238 (Delhi); Oryx Fisheries Private Ltd. v. Union of India 2011 (266) ELT 422 (S.C.). 14. On merits, it is contended by the learned counsel that refund cannot be held to be impermissible under law since eithe .....

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nt to refund the TED in respect of the exempted supplies is clear from the language of Para 8.3(c) of the FTP, the appellants are bound by the same and the restrictions which have not been provided in the FTP cannot be read into. 15. We have given our thoughtful consideration to the rival submissions made on behalf of the parties. At the cost of repetition, it may be stated that the fact that the supplies that were made by the writ petitioner to NTPC against ICB are exempted from excise duty und .....

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n for refund was not maintainable and even before any order of rejection was passed, the writ petitioner approached this court. Though the learned Single Judge had rightly held that the interference at that stage is not warranted, certain observations were made interpreting the purport of Paragraph 8.3(c) of FTP and the DGFT was directed to examine the case of the writ petitioner keeping in mind the said observations. 16. This procedure adopted by the learned Single Judge appears to be fallaciou .....

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the discretion according to law. Therefore, we are of the view that having held that the interference of the Court is not warranted in the absence of an order rejecting the claim of the writ petitioner for refund, the learned Single Judge ought not to have directed DGFT to pass an order keeping in mind the observations made therein. 17. It is also relevant to note that under Section 6(2) of the FTDR Act, 1992 the Director General of Foreign Trade is made responsible for carrying out the policy .....

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en by the DGFT is amenable to judicial review, however, even before a decision is taken by the DGFT, in our considered opinion, the learned Single Judge ought not to have directed the statutory authority that the decision be taken in a particular manner. 18. Yet another aspect we have observed is that W.P.(C)No.1331/2015 was disposed of at the threshold in the absence of the counter. It is pointed out by the learned counsel for the writ petitioner/respondent before us that the counsel for the ap .....

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he statements made on their behalf by the counsel engaged by them. However, in the facts and circumstances of the case, we are unable to hold that the appellants are precluded from contesting the entitlement of the writ petitioner to claim refund on the grounds urged in the appeals. It may be noted that the contentions advanced by the appellants have nothing to do with the facts but the whole controversy is with regard to interpretation of the provisions of the statutory policy. 20. As mentioned .....

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