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M/s. Wipro GE Healthcare Private Limited Versus Union of India, Development Commissioner Cochin Special Economic Zone (CSEZ) , The Director, Software Technology Parks of India, Department of Electronics and Information Technology, Director General of Foreign Trade, Deputy Director General of Foreign Trade

Reimbursement of Central Sales Tax (CST) - purchases of Medical Equipments from other suppliers in the course of inter-state Trade and Commerce - denial of benefit on the ground that the goods purchased from EOU - Held that: - there is no justifiable reason for the Respondent-Authority to deny such benefit of CST reimbursement to the petitioner -Company merely because the goods in question are purchased from a Unit situated in EOUs/SEZs/EHTP/STPI specified Zones or areas and deny the said benefi .....

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Foreign Trade Policy for the year 2015-2020 removed the said anomaly and discrimination as to the source of Units from which the petitioner may purchase such goods in the course of inter-state trade and commerce and the said amendment can be treated only as a clarificatory one and can be applied to the previous period also - petition allowed - decided in favor of petitioner. - Writ Petition Nos. 54015/2016 & 54173-184/2016 (T-CST) - Dated:- 3-8-2017 - Vineet Kothari, J. For the Petitioner : Mr. .....

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the issue and therefore these petitions, after hearing the learned counsels, are being disposed of by this short order, quoting the relevant extracts from the other judgments rendered by the other High Courts. 2. Mr.N. Venkatraman, Senior Counsel for Mr. Tushar Jarwal, Mr.C.K. Nandakumar and Mr. Raghuram Cadambi, learned counsels for the petitioner urged that the controversy in brief is that the petitioner - M/s. Wipro GE Healthcare Private Limited ('Company' for short) claimed reimburse .....

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, the reimbursement of CST was allowed to the petitioner - Company, in so far as the goods purchased from Domestic Tariff Area (DTA) Units (other than specified SEZs/EOUs/EHTP/STPI areas), the said benefit of reimbursement was denied by the Respondent - Authorities, if such goods were purchased from EOU/SEZ Units. 4. The said distinction about the source of purchase from two types of Units was done away with by the Respondent Union of India itself in the next Foreign Trade Policy for the year 20 .....

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ords leading to the issuance of the Impugned Circular No.1 of 2014 issued by Respondent No.2 (Annexure F) dt.25.4.2014 and Circular dated 03.09.2014 issued by Respondent No.3 (Annexure H) and the office Memorandum dated 22.06.2015 issued by Respondent No.5 (Annexure L) and the consequential letters dated 16.07.2015, issued by R1 (Annexure M), 27.01.2016 (Annexure O) issued by R3 and 19.05.2016 (Annexure R) issued by R3 and after examining their proprietary and correctness, quash them as being le .....

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as per para.6.12/6.11 of the relevant Export-Import Policy/Foreign Trade Policy as applicable; and (C) Grant such other relief as reliefs as this Hon'ble Court may deem fit and proper in the circumstances of the case." 6. The learned counsels for the petitioners have drawn the attention of the Court towards the recent decisions rendered by the three High Courts which are extracted below to the relevant extent, which not only contain the arguments raised before this Court also similarly .....

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dia Pvt.Ltd.) vide its judgment rendered on 14/06/2017 held as under: "11.8.A holistic reading of the Scheme of Chapter 6 is, indicative of the fact that, there are several entitlements available to an EOU unit, none of which seems to suggest that it is either prohibited from purchasing goods from a DTA unit or from making a domestic sale, subject to it fulfilling the threshold NFE, fixed qua the concerned unit. 12. We must, however, confess that the heading/marginal note to paragraph 6.11 .....

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meaning, which emerges on a perusal of the provisions contained in sub-clause (i) of clause (c) to paragraph 6.11 of the 2009 FTP. It is only in exceptional circumstances, and that too for guidance, if, necessary, that heading or marginal notes may be used as an aid to interpretation. (see Montila & Ors., REGINA v, [2005] 1 All ER 113; Karnataka Rare Earth and another V. The Senior Geologist, Department of Mines and Geology and another, AIR 2004 SC 2915 and Commissioner of Income Tax, Bomba .....

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had argued that since, goods manufactured by an EOU were not treated as goods manufactured in India, they were not amenable to excise duty. Based on this, it was contended that sub- clause (i) of clause (c) of paragraph 6.11 would not enable an EOU to seek reimbursement of CST qua supplies received or purchases made from a unit other than a DTA unit. 14. According to us, both contentions are fallicious, for the following reasons. (i) An EOU is nothing, but a unit, which undertakes to export its .....

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on 3 of the 1944 Act), are goods produced and/or manufactured in SEZs. Furthermore, in so far as the 100% EOUs are concerned, excise duty is levied and collected on any excisable goods which are produced or manufactured by it and brought to any other place in India. The excise duty so levied and collected is required to be equivalent to an aggregate of duties of customs, which would be leviable under the Customs Act, 1962 or any other law, for the time being in force, on like goods produced or m .....

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d by EOU units are not goods manufactured in India and, thus, do not fulfill the conditionality for reimbursement of CST, as contained in sub-clause (i) of clause (c) of paragraph 6.11 of the 2009 FTP. 16. The other argument of Mr.Rajagopalan that, if, the argument advanced on behalf of the respondent company/Writ Petitioner was to be accepted, then supplies made by one EOU unit to another EOU unit would also qualify for reimbursement of CST, which, in turn, would result in loss of Central Excis .....

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ntives to the exporters, should, in case of any ambiguity, be construed liberally in favour of the exporter. 18. Therefore, the argument of Mr.Rajagopalan that sub-clause (i) of clause (c) on paragraph 6.11 of 2009 FTP should be construed strictly, that is, akin to a taxing statute does not appeal to us. Even in a taxing statute, where the purpose and object of the provision is to incentivise growth and development, the approach adopted by the Courts is that, the concerned provision should be li .....

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ly untenable. The reason for the same is that the FTP is formulated by the Central Government by issuing a notification under Section 5 of the FTDR Act. The DGFT is the implementing authority, as is clearly discernible on a plain reading of sub-section (2) of Section 6 of the very same Act. The amendments, if any, in the FTP can only be made by the Central Government; a position, which clearly emerges upon a reading of sub-section (3) of Section 6. The Central Government is entitled to delegate .....

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(2) of Appendix 14-I-I cannot take away what has been conferred upon the respondent company/Writ Petitioner under the 2009 FTP. 19.3. The delegatee cannot be vested with powers, beyond that which is provided under the parent legislation. Clearly paragraph 2 of Appendix 14-I-I goes beyond what is provided for in the 2009 FTP, as it seeks to change the contours of the provision made in paragraph 6.11(c)(i) of the said policy. As a matter of fact, it appears that the appellant Nos.1 and 2 also unde .....

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P provided that reimbursement of CST, would be available not only qua purchases made from DTAs, but also, inter alia, vis-a-vis purchases made from EOUs. 21. The submission of Mr.Rajagopalan that the provision made in Appendix 6H of 2015 FTP, should be treated as prospective in nature in the given facts and circumstances of the case, cannot be accepted for more than one reason. Firstly, as discussed by us hereinabove, even without taking recourse to Appendix 6H of the 2015 FTP, we have come to t .....

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ion of Appendix 6H led to a course correction instead of a change in course contrary to what is sought to be contended on behalf of the appellants. 22. Thus, having regard to the scheme of Chapter 6, we are of the view that a plain reading of the provisions of paragraph 6.11 (c)(i), would have us hold that notwithstanding the fact that the respondent company/Writ Petitioner made purchases from an EOU as against DTA unit, it would be entitled to seek reimbursement of CST." 8. Following the a .....

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rchases of the goods from EOU as against DTA unit by an EOU would entitle it to seek reimbursement of CST. In view of reasons recorded above and the Division Bench decision of the Madras High Court, we are also of the opinion that the petitioner is an EOU, who is purchasing goods as a raw material from another EOU or similar units other than DTA and therefore is entitled to reimbursement of CST in terms of paragraph 6.11(c)(i) of the FTP, 2009-14 and the respondents are not legally justified in .....

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CST shall be presented inter alia to the designated officer of the STP and that the disbursing authority of such claimed amount will inter alia be the designated officer of the STP, who will make payment to the units claiming reimbursement. This is implicit from Clause (i) and (xi) of the procedure contained in Appendix 14-I-I of the Hand Book of the Procedures, which have been quoted above. The aforesaid clause makes it implicit that the designated officer of the STP is entitled to receive the .....

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and the fund made available, the STPI is authorized to make payment is not acceptable. Even if for the sake of argument that is so, it is the responsibility of the STPI to get the claims processed and to procure the funds for the settlement of claims. Accordingly, in view of the above discussion, we hold Circular No.STPN/CST/2015 dated 14.01.2015 illegal and issues a writ of mandamus directing the respondent no.1 to process reimbursement claim of CST of the petitioner in respect of goods purcha .....

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year 2009-14. The relevant extract from para graphs 18 and 21 of the said judgment are also quoted below: "18. A minute scrutiny of these provisions contained in para. 6.11 would reveal that the language used in clauses (a), (b) and (c), in general, was not made limited to the supplies from a DTA unit. As noted, clauses(a) and (b) both confined their application to the supplies made by the DTA unit. Clause(c) itself contained two situations. In sub-clause (i) what was envisaged was reimbur .....

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erstood that this clause would govern the goods purchased by EOU unit from any unit as long as the condition of goods being manufactured in India is satisfied. In plain terms, therefore, the Foreign Trade Policy 2004-2009 did not limit the benefit of CST reimbursement to a EOU on purchases made only from a DTA unit. 19. xxx xxx xxx 20. xxx xxx xxx 21. Even otherwise, the Hand Book of Procedures and in particular Appendix 1411 contained therein nowhere aims to lay down any policy but prescribes t .....

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e 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. 10. The learned Assistant Solicitor General of India appearing for the Respondent - Union of India, Mr. Krishna S. Dixit, could not rai .....

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