Terminal Excise Duty refund under deemed export policy cannot be denied merely because the supply was also exempt at clearance.

Entitlement to refund of Terminal Excise Duty under the deemed export framework turned on para 8.3(c) of the Foreign Trade Policy and related procedural provisions. The Court held that supplies under International Competitive Bidding remained eligible for refund where duty had already been paid, and refund could not be refused merely because the supplies were also treated as exempt at clearance or because the authority relied on a procedural exclusion not supported by the policy. The refund claim was therefore to be processed under the prevailing policy, and the rejection of the claim was unsustainable.

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Issues: Whether the petitioner was entitled to refund of Terminal Excise Duty on supplies made under International Competitive Bidding, notwithstanding the authority's view that such supplies were exempt from duty and that refund was not admissible.

Analysis: The petition turned on the interpretation of para 8.3(c) of the Foreign Trade Policy and the connected procedural provisions. The policy treated supplies made against International Competitive Bidding as eligible for exemption from Terminal Excise Duty, and in other cases provided for refund. The Court relied on its earlier decisions and the consistent view that once a supply falls within the deemed export framework, the entitlement to refund of duty already paid cannot be denied merely because the supply was also capable of exemption at the time of clearance. The Court accepted that the petitioner had paid the duty and that the refund claim had to be processed under the prevailing policy.

Conclusion: The petitioner was entitled to refund of Terminal Excise Duty, and the rejection of the refund claim could not be sustained.

Final Conclusion: The writ petition succeeded and the respondents were directed to process the refund claim in accordance with the 2009 policy.

Ratio Decidendi: Where the policy governing deemed exports recognizes refund of Terminal Excise Duty in the applicable category, refund cannot be denied merely because the supply was also treated as exempt at the point of clearance or because the authority views the claim as falling outside a procedural exclusion not borne out by the policy.

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