Deemed exports to EOUs can support terminal excise duty refund, independent of CENVAT or Central Excise remedies.

Supplies made to 100% Export Oriented Units were treated as deemed exports under paragraph 8.2(b) of the Foreign Trade Policy 2009-14, making the supplier eligible for refund of terminal excise duty where the prescribed conditions were met. The entitlement was not defeated by the availability of a CENVAT or Central Excise remedy, because the Foreign Trade Policy refund mechanism operated independently of those frameworks. A later liberalisation expanding TED exemption did not justify refusal of refund for duties paid under the earlier regime. On the stated facts, the supplier's refund claim was sustainable.

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Issues: Whether supplies made to 100% Export Oriented Units qualified as deemed exports under the Foreign Trade Policy 2009-14 and entitled the supplier to refund of terminal excise duty, and whether such refund could be denied on the ground that the CENVAT or Central Excise remedy was available.

Analysis: Supplies to EOUs fell within the category of deemed exports under paragraph 8.2(b) of the Foreign Trade Policy 2009-14. Under paragraphs 8.3(c), 8.4 and 8.5, such supplies were eligible for refund of terminal excise duty where the prescribed conditions were satisfied, and the record showed that the petitioner's supplies were not against international competitive bidding. The subsequent liberalisation of the policy, by which exemption from TED was expanded, did not justify refusal of refund for duties already paid under the earlier regime. The refund mechanism under the Foreign Trade Policy operated independently of any remedy under the CENVAT or Central Excise framework.

Conclusion: The petitioner was entitled to refund of terminal excise duty under the Foreign Trade Policy 2009-14, and the denial of refund on the basis of CENVAT or Central Excise considerations was unsustainable.

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