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2016 (10) TMI 520 - MADRAS HIGH COURT

2016 (10) TMI 520 - MADRAS HIGH COURT - 2016 (340) E.L.T. 170 (Mad.) - Reimbursement of the Central Sales Tax paid on goods supplied from one Export Oriented Unit to another Export Oriented Unit - intention of the Foreign Trade Policy - Held that:- A clarification has been issued by the Under Secretary, Ministry of Commerce and Industry, Department of Commerce, EOU Section, dated 11.4.2014, by way of an Office Memorandum. In the said office memorandum, it has been stated that paragraph 6.11 and .....

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Oriented Unit to another Export Oriented Unit. - The above facts make it clear that it has not been the intention of the Foreign Trade Policy 2009-2014, for the reimbursement of the Central Sales Tax paid on the goods supplied from one Export Oriented Unit to another Export Oriented unit. In such circumstances, this Court is of the considered view that the reliefs prayed for by the petitioner, in the above writ petitions, cannot be granted. Hence, both writ petitions stand dismissed. No cost .....

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14 and the Foreign Trade Policy 2015-20, are challenged and set aside, such clarifications would hold the field, with regard to the claims made by the petitioner, for the reimbursement of the Central Sales Tax, paid in respect of the goods supplied from one Export Oriented Unit to another Export Oriented Unit, relating to the financial years 2013-14 and 2014-15. - W.P.Nos.26698 and 26699 of 2015 - Dated:- 28-7-2016 - M. JAICHANDREN J. Mr. V. Srinivasan for the Petitioner. Mr. V.P. Sengottuvel, S .....

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, paid by the petitioner, for the financial years 2013-14 and 2014-15, respectively. 4. In the above writ petitions, it has been stated that the petitioner is a private limited company, incorporated under the Companies Act, 1956. The petitioner Company is a 100% Export Oriented Unit, engaged in the business of manufacturing telephone cords and charger cable assemblies. The 100% Export Oriented Unit can procure the raw materials, without duty incidence and export the manufactured goods with Net F .....

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ls from the Special Economic Zone is to pay the Central Sales Tax and to get the reimbursement of the same. It has been stated that the petitioner is entitled for reimbursement of the Central Sales Tax, paid on the goods manufactured in India, as per paragraph 6.11(c)(i) of the Foreign Trade Policy 2009-2014 and 2015-20. But, the only condition in the Foreign Trade Policy is that the goods should have been manufactured in India. 6. It has been further stated that the respondent had allowed reimb .....

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r, even though the payment of sales tax is exempted in such cases. 7. The respondent, vide letter, dated 22.1.2015, had stated that under the existing provisions already available in the relevant Foreign Trade Policy and the Central Sales Tax Act, the supply of goods to the Export Oriented Units shall be treated as Deemed Exports and the payment of the Central Sales Tax is exempted. Hence, the petitioner had been advised to approach the Sales Tax authorities, for exemption of the payment of the .....

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luded, would not arise. As the Special Economic Zone supplier from Noida had continued their supply of materials with the Central Sales Tax and as the petitioner had paid the Central Sales Tax against the 'C' Form, for the procurement of the materials from the Special Economic Zone, the petitioner had made a claim for the reimbursement of the Central Sales Tax already paid, for the periods 2013-14 and 2014-15, vide letter, dated 16.5.2015. 8. It has been further stated that the responden .....

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of Foreign Trade, Government of India, it was clarified in the Appendix-6H of the Foreign Trade Policy 2015-20 that the Export Oriented Units would be entitled to full reimbursement of the Central Sales Tax paid by them, on the purchases made from the Domestic Tariff Area or Export Oriented Unit or Special Economic Zone or Electronics Hardware Technology Parks or Software Technology Parks or Bio-Technology Parks. Thus, it is clear that there is no change in the provisions for the entitlement of .....

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al Sales Tax paid by the petitioner on the materials procured from the Special Economic Zone units, for the period 2013-14 and 2014-15, stating that the amended procedure takes effect, prospectively, and therefore, it does not apply to the prior period, vide letter, dated 15.6.2015. 10. The learned counsel appearing on behalf of the petitioner had placed before this Court an order passed by the learned Single Judge of this Court, dated 30.3.2016, made in W.P.Nos.15646 and 26004 of 2014, in suppo .....

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es made from the 100% Export Oriented Unit. The learned Single Judge had stated, in his order, dated 30.3.2016, that, when the policy provides for the reimbursement of the Central Sales Tax, under paragraph 6.11, the said objective had been prevented or diluted by the Appendix. He had further held that the Appendix is meant for giving effect to the rights contained in the policy and not to frustrate the operation of the substantive right. 11. Mr. V.P. Sengottuvel, learned Senior Central Governme .....

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e Export Oriented Units and the other units mentioned therein, would be entitled to full reimbursement of the Central Sales Tax paid by them, on the purchases made from the Domestic Tariff Area, for the production of goods and services, as per the Export Oriented Units Scheme, based on certain terms and conditions. The petitioner would not be entitled for such reimbursement of the Central Sales Tax, said to have been paid by it, as the materials had been purchased by the Export Oriented Unit, fr .....

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9.21 of Foreign Trade Policy read with Appendix 14-I-I does not provide for reimbursement of CST paid on goods supplied from one EOU to another EOU. Therefore, the claim of M/s. Hospira Healthcare India Private Limited cannot be considered. II. However, since it is also the National Policy to promote exports and to reimburse of taxes suffered on goods exported from India, DGFT may consider a suitable amendment in the FTP as deemed fit." 12. Further, the Assistant Development Commissioner, .....

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he Central Sales Tax, for the period mentioned, in its letter, dated 16.5.2015, had been rejected. 13. From the submissions made by the learned counsel appearing on behalf of the petitioner, as well as the learned counsel appearing on behalf of the respondent and on perusal of the records available, it is noted that the Assistant Development Commissioner, Government of India, Ministry of Commerce and Industry, by his communication, dated 15.06.2015, had made it clear that the Foreign Trade Polic .....

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