TMI Blog2022 (9) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has directed credit of the duty paid to the CENVAT Register of that assessee for the reason that, pending litigation, the era of Central Excise had been subsumed into Goods and Service Tax regime with no avenue available for receipt of the amount in cash. The GST Authorities were thus impleaded to ascertain the mechanism presently in vogue. In their counter dated 10.08.2022, the GST Central Excise Authority have merely distanced themselves from the present litigation stating that it is for the DGFT to take a view in regard to the refund - petition allowed. - W.P.No.9576, 9580 And 16056 of 2019 - - - Dated:- 11-8-2022 - Honourable D R. Justice Anita Sumanth For the Petitioner : Mr.Rohan Muralidharan Mr.Ganesh Aravindh for M/s. Lakshmi Kumaran and Sridharan Attorneys For the Respondents : Mr.V.Chandrasekaran [R1 to R5] Senior Panel Counsel Mr.A.P.Srinivas [R5 R6] Senior Standing Counsel ORDER These three writ petitions have been filed seeking refund of terminal excise duty (TED) claimed by the petitioner in regard to the duty paid on supply of laptops to licence holders of Export Promotion Capital Goods (EPCG) Scheme. The petitioner had made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier in terms of para 8.4.2. As noted earlier, in terms of para 6.11(a), the EOU can also avail of those entitlements of DTA as specified in Chapter 8 of FTP, as had been earmarked for DTA supplier. That does not mean that EOU is eligible for those entitlements, on its own accord as, amongst other, it is obliged to obtain disclaimer from DTA supplier as a precondition. 21. As aforementioned, para 8.2 lists the categories of supply of goods which are regarded as deemed exports including supply of goods to EOU [para 8.2 (b)]. The specified transactions are provided certain benefits mentioned in para 8.3, subject to terms and conditions in the handbook procedures, volume I, published under FTP. Para 8.3(c), inter alia, envisages that exemption from TED is available for supplies made against International Competitive Bidding31 and also to Advance Authorisation Holder to a manufacturer holding another advance authorisation if such manufacturer supplies the products to an ultimate exporter. In other cases, (would include other DTA suppliers of goods to EOU), however, refund of TED will be given. Further, the expression will is to be construed as a mandate to give refund t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty paid by supplier of goods. A declaration to this effect, in Annexure III of ANF 8, from supplier of goods, shall be submitted by applicant. Such supplies shall however be eligible for deemed export drawback on customs duty paid on inputs/components. (amendments highlighted) 8.5.1 Simple interest @ 6% per annum will be payable on delay in refund of duty drawback and terminal excise duty under deemed export scheme, if the case is not settled within 30 days of receipt of complete application (as in paragraph 9.10.1 of HBP v1). 24. Similarly, benefit under para 8.3(b) of FTP regarding deemed export drawback can be availed, provided CENVAT credit/rebate has not been availed by DTA supplier and subject to complying other formalities. Para 8.4.2 as originally stood, is indicative of option given only to supplier (DTA) in connection with supply of goods to EOU, as specified in para 8.3 (a), (b) and (c) of FTP. That has remained intact despite the amendment of 2012, until March 2013. Be it noted that the purport of para 8.5 states that supply of goods will be eligible for TED refund only if CENVAT credit/rebate has not been availed on such goods. These stipulations demo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against Advance Authorisation [Para 8.3(c) of FTP]; (ii) Supply of goods under ICB [Para 8.3(c) of FTP]; and (iii) Supply of goods to EOUs [Para 6.11(c)(ii) of FTP] 3. Prudent financial management and adherence to discipline of budget would be compromised if refund is provided, in cases, where exemption is mandated. In fact, in such cases the relevant taxes should not have been collected to begin with. And if, there has been an error/oversight committed, then the agency collecting the tax would refund it, rather than seeking reimbursement from another agency. Accordingly, it is clarified that in respect of supplies, as stated at Para 2 above, no refund of TED should be provided by RAs of DGFT/Office of Development Commissioners, because such supplies are ab-initio exempted from payment of excise duty. 4. This issue with the approval of DGFT. (Jay Karan Singh) Joint Director of Foreign Trade .. (emphasis supplied) 27. As regards the claim for refund of TED by EOU, therefore, need to be governed by the dispensation provided in para 6.11(a) read with entitlement of DTA supplier under Chapter 8 of FTP. However, it may have to be process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as the goods imported or supplied to EOU shall be with actual user condition and shall be utilised for export production and that the EOU did not avail CENVAT credit or rebate in relation to the goods supplied to EOU. Similarly, if the DTA supplier has utilised the CENVAT credit, commensurate amount needs to be reversed to its CENVAT credit account, in which case, there is no question of refunding the amount in cash to the DTA supplier. 32. We shall now revert to the judicial pronouncements dealing with the subject FTP. Except the decision of the Bombay High Court commended to us, which is under challenge in the first two appeals pertaining to refund claim by EOU, all other reported decisions are in respect of DTA supplier of specified goods/services. 10. There is thus no doubt in my mind and Mr.Chandrasekaran, learned Senior Panel for R1 to R5 would fairly accede to the position, that a supplier to a EOU/licence holder under the EPCG scheme, is entitled to refund of terminal excise duty. In the present case, there is no dispute on the position that the petitioner has, in fact, paid the refund at the first instance. At para 10 of order dated 25.01.2017, the officer stat ..... 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