TMI Blog2016 (4) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The petitioner can be prevented only if the policy is amended prohibiting refund of tax for the purchases made from an 100% EOU. The procedure was to be prescribed by an authority in implementing the policy and must be in consonance with the policy. If the procedural norms are in conflict with the policy, then the policy will prevail and the procedural norms to the extent they are in conflict with the policy, are liable to be held to be bad in law. Since the impugned communciations are in conflict with paragraph 6.11 of the Foreign Trade Policy, the same are liable to be set aside. - Decided in favour of appellant - W. P. Nos. 15646 & 26004 of 2014 and MP No. 1 of 2014 in WP No. 26004 of 2014 - - - Dated:- 30-3-2016 - M. Duraiswamy, J. For the Petitioner : Mr. N. Venkataraman Senior Counsel for Mr. J. Shankar Raman For the Respondents : Mr. V. P. Sengottuvel, SCGSC ORDER In W.P.No.15646 of 2014, the petitioner has prayed for issuance of a Writ of Certiorarified Mandamus to call for the records relating to the communication dated 28.04.2014 to the first respondent, pursuant to the communication daed 11.04.2014 of the third respondent and quash the same and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion dated 31.03.2003. The petitioner has been periodically filing quarterly and annual returns with the Development Commissioner, MEPZ, Chennai, who is an authority coming under the control of the third respondent. 6. According to the petitioner, the imported raw materials are normally subject to aggregate customs levy such as Basic Customs Duty (BCD), Counter veiling Duty (CVD), Special Additional Duty (SAD) and Education Cess, which are however not collected when imported by 100% EOU. When the raw materials are imported, in terms of Customs Notification dated 31.03.2003 the petitioner Company, being an 100% EOU was allowed to import duty free on the strength of the Procurement Certifcate (PC) issued by the jurisdictional Central Excise Authorities to the customs authorities who allowed such clearances at the Port of import. Similarly, the raw materials procured indigenously, from local manufacturers including 100% EOU situated in India, are also allowed to be procured duty free in terms of the Notification issued by Central Excise dated 31.03.2003 on the strength of C.T 3 certificate issued by the jurisdictional central excise authorities. 7. According to the petitioner, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.11 of Foreign Trade Policy read with provisions contained in the Hand Book of Procedures (HBP), the petiitoner has been filing periodical refund claims every quarter for refund of CST paid on purchase made from the said 100% EOU. The quarterly claims are to be filed with the Development Commissioner, MEPZ, Chennai, who is the authority empowered to admit, process and sanction the claims. The petitioner Company had filed claims for refund of CST for the Assessment years 2010-2011 and 2011-2012, which were sanctioned. The refund claims, filed by the petitioner Company from January 2012 to March 2012 onwards were not sanctioned and were kept pending by the third respondent without assigning any reason. 10. When the petitioner company requested the third respondent to sanction the refund claims, filed by the petitioner, they were informed orally that the claims were not released on the ground that the procurements were made from another 100% EOU by the petitioner company and the objection is raised as to the eligibility of the same under Foreign Trade Policy which only allows reimbursement for procuremetns from a Company in Domestic Tariff Area. The petitioner informed the third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn Trade Policy. 13. Mr.N. Venkataraman, learned Senior Counsel, appearing for the petitioner submitted that paragraph-6.11 of the Foreign Trade Policy provides for certain entitlements/benefits for EOU units and Appendix 14.I-I is an application form providing for particulars, as required by the second respondent for granting reimbursement of CST. Further, the learned Senior Counsel contended that paragraph 6.11 of the Policy provides for benefit basis goods manufactured in India and there is no restriction or qualification as provided for exemption from Central Excise Duty under Sub-clause (ii) of sub para (c) of Para 6.11 of the Policy. Therefore, as long as the goods are manufactured in India , the purchasing EOU is entitled to get reimbursement of CST irrespective of the category of the selling unit. Further, the learned Senior Counsel also submitted that the selling unit can either be a DTA unit or an EOU unit and the substantive right under the Policy allows for reimbursement of CST paid by EOU units on inter-state purchases, irrespective of the constitution of the manufacturer. Therefore, the procedure for effecting this right, however, is restricted only to the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd a lower rate would be considered justified in the case of such a commodity. There may be several such considerations bearing directly on the choice of the rate of sales tax, and so long as there is go od reason for making the distinction from other commodities no complaint can be made. What the actual rate should be is not a matter for the courts to determine generally, but where a distinction is made between commodities fairing in the same category a question arises at once before a Court whether there is justification for the discrimination. (iii) 2015 (7) SCC 58 (M.P. Steel Corporation vs Commissioner of Central Excise, wherein the Apex Court has held as follows: 23. Substantive law refers to a body of rules that creates, defines and regulates rights and liabilities. Right conferred on a party to prefer an appeal against an order is a substantive right conferred by a statute which remains unaffected by subsequent changes in law, unless modified expressly or by necessary implication. Procedural law establishes a mechanism for determining those rights and liabilities and a machinery for enforcing them. Right of appeal being a substantive right always acts prospectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament.... and then he must supplement the written words so as/to give 'force and life' to the intention of legislature .... A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out? He must then do as they would have done. A judge must not alter the material of which the Act is woven, but he can and should iron out the creases. (vi) AIR 1997 SC 1511 (State of Bihar and Others vs Bihar Distillery Ltd), wherein the Apex Court has held as follows: 21. We may also refer to the following perceptive observations in the decision of Lord Denning is Seaford Court Estates Ltd. v. Asher [1949 (2) K.B. 481]: Whenever a statute comes up for consideration it must be remembered that it is not within human power to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity. The English language is not an instrument of mathematical precision. Our literature w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e poorer if it were. This is where the draftmen of Acts of Parliament have often been unfairly criticized. A Judge, believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity. It would certainly save the judges trouble if Acts of Parliament were drafted with devine prescience and perfect clarity. In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the langug of the statute, but also from a consideration of the social conditions which gave rise to it and of the mischief which it was passed to remedy, and then he must supplement the written word sc as to give force and life to the intention of the legislature. That was clearly laid down by the resolution of the judges in Heydon's cse, and it is the safest guide to-day. Good practical advice on the subject was given about the same time by Plowden in his second volume Eyston vs Studd. Put into homely meta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. It is settled law that in order to claim benefit of a Notification a party must strictly comply with the terms of the Notification. If on wordings of the Notification the benefit is not available then by stretching the words of the Notification or by adding words to the Notification benefit cannot be conferred. The Tribunal has based its decision on a decision delivered by it in Rukmani Pakkwell Traders v. CCE, Trichy [1999 (109) E.L.T. 204]. We have already overruled the decision in that case. In this case also we hold the decision of the Tribunal is unsustainable. It is accordingly set aside. (ii) 2009 (5) SCC 46 (Atul Commodities Private Limited and others vs Commissioner of Customs, Cochin-9), wherein the Apex Court held as follows: 29. Before coming to the circulars, one needs to understand the Scheme of the 1992 Act. The said Act is enacted to provide for development and regulation of Foreign Trade by facilitating imports into, and augmenting exports from India. Under Section 3, the Central Government is empowered by Order published in the Official Gazette to make provision for the development and regulation of foreign trade. Under sub-section (2) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in paragraph 39 it was observed : 39. In Premium Granites vs. State of T.N., 1994(2) SCC 691 while considering the Court's powers in interfering with the policy decision, it was observed at page 715 as under: (SCC para 54) 54. It is not the domain of the Court to embark upon the unchartered ocean of public policy in an exercise to consider as to whether a particular public policy is wise or a better public policy can be evolved. Such exercise must be left to the discretion of the executive and legislative authorities as the case may be. 18. On a careful consideratioin of the materials available on record, the submissions made by the learned counsel on either side and considering the judgments relied upon by the learned counsel on either side, it could be seen that under Sec.5 of The Foreign Trade (Development and Regulation) Act, 1992 read with Notification No.1/200902014 dated 27.08.2009; the Central Government has notified the Foreign Trade Policy 2009-2014. The Policy contains various incentive schems such as Advance Authoristion, Export Promotion Capital Goods (EPCG) Scheme etc. The provisions relating to the EOU scheme have been enumerated in Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be applicable for reimbursement of Central Sales, 2. The Export Oriented Units (EOUs) and units in Electronic Hardware Technology park (EHTP) and Software Technology Park (STP) will be entitled to full reimbursement of Central Sales Tax (CT) paid by them on purchases made from the Domestic Tariff Area (DTA), for production of goods and services as per EOU scheme on the following terms and conditions: (a)....... 21. On a perusal of paragraph 6.11 of the Policy, it could be seen that sub clause (i) deals with reimbursement of Central Sales Tax in respect of goods manufactured in India. Sub clause (ii) provides for exemption from payment of Central Excise Duty on goods procured from DTA on goods manufactured in India, sourced or procured from Domestic Tariff Area. 22. Insofar as Central Excise Duty is concerned, exemption is available if the goods are manufactured in India and if the goods are procured from DTA, whereas for reimbursement of CST, the only requirement is that the goods must be manufactured in India. There is no requirement of a specific place of procurement, such as DTA. 23. In Paragraph 9.21 DTA has been defined as area within In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t granted to the petitioner. 29. On comparing the New Foreign Trade Policy 2015-2020 with that of Foreign Trade Policy 2009-2014 it is clear that the substantive provision has remained identical and unchanged as was originally provided in paragraph 6.11 of the 2009-2014 Policy. In the case of any amendment made in 2015-2020 Foreign Trade Policy, with regard to paragraph 6.11 of 2009-2014 policy, in that case, the respondents can take a stand that the Appendix 14-I-I and 6-H are in consonance with the terms of the policy. 30. On a perusal of both the policies i.e., 2009-2014 and 2015-2020, it is clear that the authorities have not made any change in the new policy, which came into effect on 1.4.2015 in respect of paragraph 6.11 and also with regard to paragraph 6.17 of the Hand Book of procedures and also in Appendix 6-H. Paragraph 6.11 in the new policy, is verbatim reproduction of paragraph 6.11 of the old policy. 31. Since the substantive provision has remained identical and unchanged, the conditions stated in Appendix 14.I-I cannot be pressed into service, for the reason that it runs contrary to the terms of the policy. Even as per Appendix 6-H, it is clear that CST pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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