Deemed export refunds under the pre-2013 FTP could not be denied for CENVAT-paid supplies to export units.

Supplies from a domestic tariff area to a 100% export oriented unit were treated as deemed exports under the unamended Foreign Trade Policy 2009-2014, and paragraph 8.3(c) allowed refund of terminal excise duty where the supplies were not made against international competitive bidding. The later amendment of 18.04.2013 introduced a different regime, making such supplies ab initio exempt and limiting refund to cases where exemption was unavailable, but that change did not apply to earlier claims. A 15.03.2013 circular could not override the unamended policy. Duty paid through the CENVAT credit route did not defeat entitlement for the pre-amendment period.

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Issues: Whether a domestic tariff area supplier who supplied goods to a 100% export oriented unit on payment of excise duty through the CENVAT credit route was entitled, for supplies made prior to 18.04.2013, to refund of terminal excise duty under the Foreign Trade Policy 2009-2014.

Analysis: Supplies from a domestic tariff area to a 100% export oriented unit were treated as deemed exports under Chapter 6 of the Foreign Trade Policy 2009-2014, and paragraph 8.3(c), as it then stood, allowed refund of terminal excise duty where supplies were not made against international competitive bidding. The policy also linked the benefit to the recipient not availing CENVAT credit or rebate. The later amendment dated 18.04.2013 changed the scheme by providing that refund would be available only if exemption was not available and expressly made supplies by a domestic tariff area unit to an export oriented unit a category of ab initio exempt supplies. That amendment could not govern claims relating to the earlier period. The 15.03.2013 circular could not override the unamended policy for the relevant period. The fact that duty was paid through the CENVAT credit route did not defeat the policy entitlement, and the prior grant of refund for earlier quarters supported the same treatment for an identical subsequent period.

Conclusion: The petitioner was entitled to refund of terminal excise duty for the period October 2011 to December 2011, and the rejection order was unsustainable.

Ratio Decidendi: For supplies treated as deemed exports under the unamended Foreign Trade Policy 2009-2014, refund of terminal excise duty could not be denied for the pre-amendment period merely because the duty had been paid through the CENVAT credit route or because a later circular and amendment introduced a different regime.

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