TMI Blog2018 (7) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... .5 of the FTP 2009-2014 also alludes to the fact that the supply of goods would be eligible for refund of TED in terms of paragraph 8.3(c) of the FTP provided the recipient of the goods does not avail of CENVAT credit or rebate on such goods. The petitioner’s entitlement to refund of TED will be governed by the relevant provisions of the FTP as obtaining in the relevant period for which the claim was made. The fact that the petitioner could or could not get refund under the CENVAT Credit Rules or under the provisions of the Central Excise Act is not relevant for adjudicating upon the issue at hand. The Court, for adjudicating the issue at hand required to look at only the relevant provisions of the FTP. The argument that since excise duty was not paid via cash but was paid by utilizing the CENVAT credit route and hence, the petitioner would not be entitled to claim refund is unsustainable as there is no bar in law in paying duty by utilizing CENVAT credit. The impugned communication dated 21.04.2016, issued by respondent no.3, whereby the petitioner’s claim for refund was declined is set aside - petition allowed - decided in favor of petitioner. - W.P.(C) No.6151/2016 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s application by respondent no. 3 was based on the decision taken by the PRC/ PIC at its meeting held on 04.12.2012. 2.4 In view of the fact that the PRC had at its meeting held on 09.09.2014, cleared its request for refund of TED against supply of goods made to 100% EOUs, an application was filed with respondent no.4 on 23.09.2014 for refund of TED for October, 2011 to December, 2011. Reference in this application was made to the decision taken in the PRC meeting on 09.09.2014. 2.5 The record shows that the following objection by way of an endorsement was made on the petitioner s application itself, whereby, in effect, the petitioner s request for refund of TED was rejected: - Since PRC has cleared only those cases which have been admitted by Court and as per decision of judgment of Delhi High Court. As per courts order, only two cases have to be considered for refund of TED 2.6 The petitioner, thereafter, on 11.10.2014 escalated the matter to the Chairperson PRC for processing its demand for refund of TED for the subject period and take in its earlier application based it on the decision of the PIC/ PRC dated 09.09.2014. 2.7 In response thereto, on 05.12.2014, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified vide its letter dated 17.04.2015 that where a domestic supplier supplied goods to an EOU on which duty had been paid via the CENVAT credit route, no refund was permissible. 4. Being aggrieved, the petitioner has approached this Court, as indicated above, via the instant writ petition. Upon notice being issued in the writ petition on 20.07.2016, a common counter affidavit was filed on behalf of the respondents. The record shows that no substantial hearings were held in the matter till 30.01.2018. On this date, though, after I heard arguments for sometime, it emerged that the Government of India, Ministry of Commerce and Industries, Department of Commerce, DGFT had taken out a trade notice No.17 of 2016, dated 22.09.2016, which had a bearing on the matter. 4.1 Having been made cognizant of the same, the respondents counsel sought accommodation to obtain instructions vis- -vis the said trade notice. The matter was posted for further proceedings on 06.02.2018, when arguments were heard and judgment was reserved. Counsel for the parties were given time to file written submissions. 5. Since then, written submissions have been filed by both sides. The petitioner, during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v) The reliance placed by the respondents on the policy Circular No.16(RE-2012/2009-2014), dated 15.03.2013, is erroneous, inasmuch as the said circular is, firstly, not consistent with the provisions of paragraph 8.3 read with paragraph 8.4 of FTP 2009-2014 and secondly, the said circular, if at all, can have effect only prospectively. In this behalf, the submission made was that the circular which is beneficial to the assessee can apply retrospectively and that which is oppressive or against the interest of assessee can apply only prospectively. For this proposition, reliance was placed on the judgment of the Supreme Court in Suchitra Components Ltd. v. Commissioner of Central Excise, 2008 (11) S.T.R. 430 (S.C.). vi) The petitioner, under the extant regime, had the option of either availing an exemption or seeking a refund, and having chosen the latter course, its request for refund could not have been declined. In support of this submission, reliance was placed on the following judgments: a) HCL Ltd. vs. Collector of Customs, 2001 (130) E.L.T. 405 (S.C.); and b) Share Medical Care v. Union of India, 2007 (209) E.L.T. 321 (S.C.). vii) The responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken not to grant the petitioner refund for the subsequent quarter, was considered by the respondent no.1 in its meeting held on 17.03.2015. Respondent no.1, for good reason, has declined to accept the request of the petitioner for refund of TED. (iii) The policy Circular No.16, dated 15.03.2013, was only clarificatory in nature. The clarification was necessary as persons/ entities who had supplied goods from DTA to 100% EOUs had paid duty on that via the CENVAT credit route and by seeking refund of TED were monetizing the duty against deemed exports whereas, refund of duty in cash was available only against physical-exports. (iii)(a)This aspect was reflected in the policy circular No.16 of 15.03.2013 which, inter alia, exemplifies the fact that prudent financial management and adherence to discipline, which is its object, would be compromised if refund is provided even in cases where ab initio exemption is available. (iii)(b) The 2013 amendment notification provided for what was already incorporated in chapter 6 of the FTP 2009-2014, which is, that ab initio exemption would be available for supply of goods by a DTA unit to an EOU. (iii)(c) Therefore, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the petitioner without payment of excise duty, and hence, applications for refund were not maintainable. (iv)(a) This conclusion of the licensing authority was based on the decision taken at the PIC meeting held on 04.12.2012. At this meeting, the PIC, inter alia, concluded that refund of TED was not available since paragraph 6.11 of FTP 2009-2014 provided that EOU could obtain goods without payment of excise duty and that refund of excise duty was allowed under CENVAT Credit Rules. v) Against the said decision, appeals were preferred to the Directorate General of Foreign Trade (DGFT), which were dismissed on 23.08.2013 on the ground that these were not appealable orders under Section 15(1) of Foreign Trade (Development and Regulation) Act, 1992 ( 1992 Act ). vi) Against this decision the petitioner preferred a writ petition to the High Court. This writ petition was numbered as W.P.(C) No.8160/2013. The said writ petition was disposed of by this Court vide order dated 27.03.2014. This Court remanded the matter to the DGFT to decide the appeal, as according to it, the provisions of Section 15(1) of the 1992 Act were wide enough to entertain an appeal against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... despite PRC s earlier decision of 04.12.2012, the third application for the quarter October, 2011 to December, 2011 was rejected despite the facts and circumstances of the case being pari materia with other two quarters. 9.1 The argument sought to be put forth on behalf of the respondents on merits is also unsustainable which I would shortly demonstrate in view of the provisions which obtain in the FTP of 2009-2014. 9.2 Therefore, before I proceed further, let me advert to the relevant provisions of the FTP 2009-2014. 9.3 Chapter 6 of the FTP 2009-2014 pertains to EOUs. Para 6.2(b) of the FTP 2009-2014, on which great emphasis has been placed by the respondents, inter alia, provides that an EOU may import and/ or procure from DTA or bonded warehouses in DTA/ International exhibition, held in India, goods which include capital goods, that is, those required for its activities, without payment of duty provided the goods are not prohibited items of import under ITC (HS). 9.4 Para 6.2(d) makes a similar provision for certain specified goods to enable EOU to create a central facility. 9.5 Para 6.11(a) speaks, inter alia, about supplies received by a EOU from a DTA being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect in the prescribed form is required to be filed by the applicant while seeking refund. In other words, the DTA supplier can seek refund only if the EOU has not availed of CENVAT credit or rebate on such goods. 12. As indicated above, paragraph 8.3 of the FTP 2009-2014 was amended vide notification No.4 dated 18.04.2013. For the sake of convenience, the amended para 8.3 of the FTP 2009-2014 is extracted hereafter: - 8.3 Benefits for Deemed Exports Deemed exports shall be eligible for any / all of following benefits in respect of manufacture and supply of goods qualifying as deemed exports subject to terms and conditions as in HBP v1:- (a) Advance Authorisation/Advance Authorisation for annual requirement/DFIA. (b) Deemed Export Drawback. (c) Refund of terminal excise duty will be given if exemption is not available. Exemption from TED is available to the following categories of supplies: (i) Supplies against ICB; (ii) Supplies of intermediate goods, against invalidation letter, made by an Advance Authorisation holder to another Advance Authorisation holder; and (iii) Supplies of goods by DTA unit to EOU/EHTP/STP/BTP unit Thus s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point in time the worst that could be said against the petitioner is that it had available to it two options, first, to claim exemption and second, to pay duty and claim refund. This is, especially so, in view of the fact that in the instant case supplies of goods were made by the petitioner to other divisions of MSSL which had a status of EOUs. The pivotal point is that the FTP 2009-2014 conferred a right on the petitioner, who, admittedly, was a DTA supplier, at the relevant point in time, to seek refund of TED, as the supplies had been made to 100% EOUs, albeit, under a non-ICB route. 15.1 To my mind, the argument that since excise duty was not paid via cash but was paid by utilizing the CENVAT credit route and hence, the petitioner would not be entitled to claim refund is unsustainable as there is no bar in law in paying duty by utilizing CENVAT credit (See paragraph 17 of Jayaswal Neco Ltd.). 15.2 For the very same reason, I am not impressed by the argument advanced on behalf of the respondents that the refund of TED would result in monetization of CENVAT credit. The object of the FTP is to provide impetus to export either by direct physical export or via the deemed expo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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