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2018 (10) TMI 711

Refund of Terminal Excise Duty - deemed exports - FTP - DGFT has rejected the petitioner’s claim on the ground that the benefit of refund is available to it under the provisions of Central Excise Act and Rules - Held that:- The refund of TED claim in this case pertains to export and transaction prior to 15.03.2013. The crucial clarificatory circular was issued on that day. Two applications made in respect of sales to the EOUs (Vimal Agro Products Pvt. Ltd. and TATA Coffee Ltd.) covered various periods prior to 15.03.2013. This aspect is of significance and appears to have completely lost sight off. The DGFT – as well as Central Excise Authorities have not principally denied that the supplies were made to EOUs (Vimal Agro Products Pvt. Ltd. and TATA Coffee Ltd.). In these circumstances, the question is what constitutes the entitlement of such unit that supplied the goods to Export Oriented Units. - In the event, there is no dispute – as it appears to be having regard to the pleadings – that the supplies were made to EOU/EHTP/STP/BTP (categorically spelt out in 8.2). Benefit of deemed export under para 8.3 i.e. advance authorization [clause (a)], deemed export drawback [clause ( .....

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would be given if exemption is not available; since exemption from CVD was available for supplies. The petitioner contended that an application was filed for refund of TED paid to the office of the Joint DGFT in respect of supply of tin containers to Vimal Agro Products Pvt. Ltd. against payment of Terminal Excise Duty (TED) during January 2012 to March 2013 i.e. prior to the issue of Circular No.16 dated 15.03.2013. This application was returned. Subsequently, another refund application (covering the period April, 2012 to January, 2013) made in respect of TATA Coffee Ltd. too was not taken into consideration. The petitioner then applied refund claim with Central Excise Department for the same on 11.03.2014. The Dy. Commissioner of Excise thereafter issued a show cause notice on 01.10.2014 proposing to disallow the refund claim, which was contested. The refund claim was rejected by the excise authority by order-in-original dated 29.05.2015. Aggrieved, the petitioner approached the Dy. Commissioner in appeal, which was rejected on 16.11.2016. The petitioner unsuccessfully approached the CESTAT, which in its Chandigarh Bench, rejected the appeal. 3. It is contended by Mr. R. Krishnan .....

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ner and proceeded to hold that the petitioner was disentitled to the benefit of refund in view of some clarification given by the Policy Interpretation Committee, in its meeting of 04.12.2012 to the effect that refund of CENVAT credit provisions are available under Excise rules and CENVAT rules which should be availed of rather than claiming refund . This reasoning appears to have prevailed with the Policy Relaxation Committee as well in this case. This Court is unable to comprehend the rationale of the decision of the second and third respondents who also seem to have suggested that the petitioner should approach the DGFT for appropriate relief or clarification. Neither of the authorities dispute that the petitioner supplied goods to the EOU at the relevant time. Its entitlement, therefore, was defined in terms of the existing policy, i.e. refund in terms of paras 8.2, 8.3, 8.4 and 8.5 of the 2009 policy as discussed above. That a subsequent amendment was made to the existing regime which in effect liberalized the position further and exempted payment of TED altogether cannot surely be a reason for denying the scheme for refund of payment already made. The Court also is unable to .....

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xempted from payment of Central Excuse Duty. Applicant can take benefit under FTP subject to the conditions given in FTP/HBP. If FTP provides for exemption from payment of TED, it cannot, on its decide to pay duty and claim refund. 11. That para 8.3(c) of FTP 2009-14, provides for benefit of the Terminal Excise duty (TED). This covers both - TED refund as well as TED exemption, as applicable for different types of cases. TED refund is allowed where TED exemption is not available. The Respondent submit that these provisions have been clarified vide Policy Circular No.16 dated 15.03.2013 issued by DGFT. The Respondents also submit that this policy circular has not introduced any new conditions/provisions, it has merely clarified the provisions of Para 8.3(c) of FTP-2009-14, which has already been in existence. 12. That none of the provisions laid down in the Handbook of the Procedure or the Foreign Trade Policy permits an exporter to make a choice on the method of seeking benefit regarding the TED. It is no where mentioned that the exporter may first opt for the payment of TED and thereafter he may seek refund of the same. TED exemption or refund is to be taken as provided for in FTP .....

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ractors shall be regarded as Deemed Exports under FTP, provided goods are manufactured in India : (a) Supply of goods against Advance Authorisation/Advance Authorisation for annual requirement/DFIA; (b) Supply of goods to EOU/STP/EHTP/BTP; (c) Supply of capital goods to EPCG Authorisation holders; (d) Supply of goods to projects financed by multilateral or bilateral Agencies/Funds as notified by Department of Economic Affairs (DEA), MoF under International Competitive Bidding (ICB) in accordance with procedures of those Agencies/Funds, where legal agreement provide for tender evaluation without including customs duty; (e) Supply of capital goods, including in unassembled / disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till stage of commercial production, and sparesto extent of 10% of FOR value to fertilizer plants; (f) Supply of goods to any project or purpose in respect of which the MoF, by a notification, permits import of such goods at zero customs duty; (g) Supply of goods to power projects and refineries not covered in (f) above; (h) Supply of marine freight containers by 100% EOU (Domestic .....

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] or exemption from TED - in case of supplies made against International Competitive Bidding (ICB) or in other case of refund of TED. Clause (c) accrues to the concerned party i.e. supplier to EOU/STP. In this case, the petitioner s primary claim is that it is the supplier to such EOUs and that such supplies were made before 15.03.2013. This clear aspect has been completely overlooked and lost sight off by the respondent DGFT, which appears to initially reject the claim on the ground that the benefit the petitioners seeks entitlement of, was inadmissible because Central Excise benefit could be claimed. As is evident from the record, Central Excise officials when approached held that no refund could be made and the basic excise duty was admissible and correctly so. What the petitioner claims, was refund of duty in terms of clause 8.3(c) of FTP 2009-13 as it stood prior to 15.03.2013. 9. In view of the foregoing discussion, the court is of the opinion that the petitioner s claim has to succeed. A direction is issued to the respondents to entertain the petitioner s refund applications returned to it; the refund applications shall be processed within eight weeks and interest shall be p .....

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