Prospective policy amendment cannot defeat terminal excise duty refund claims for pre-amendment EOU supplies.

Goods supplied to an Export Oriented Unit during the pre-amendment period were to be tested under the Foreign Trade Policy 2009-14 in force at the time of supply, and deemed exports under paragraphs 8.3(c) and 8.5 were eligible for terminal excise duty refund subject to the stated conditions. The later amendment and the 15-3-2013 circular, which introduced a restriction where exemption was available ab initio, were held inapplicable to earlier supplies because the change was prospective and could not defeat an accrued refund claim. The rejection communication was therefore quashed, and the refund claim had to be considered under the unamended policy.

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Issues: Whether goods supplied to an Export Oriented Unit during the pre-amendment period were eligible for refund of terminal excise duty under the Foreign Trade Policy 2009-14, and whether the later notification and circular could be applied retrospectively to deny such refund.

Analysis: The entitlement had to be determined by the policy in force at the time of supply. Under paragraphs 8.3(c) and 8.5 of the Foreign Trade Policy 2009-14, deemed exports were eligible for refund of terminal excise duty, subject to the stated conditions. The subsequent amendment and the circular dated 15-3-2013, which introduced a restriction against refund where exemption was available ab initio, could not be used to defeat a refund claim arising from supplies made before the amendment. The change in policy was treated as a liberalising amendment and therefore prospective in operation, not retrospective. The Court preferred the view that refund could not be denied merely because the later policy framework excluded such supplies.

Conclusion: The petitioner was entitled to have the refund claim considered under the unamended 2009 Policy, and the impugned communication rejecting the claim was quashed.

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