Deemed exports and Terminal Excise Duty refund upheld for DTA supplies to an EOU under Foreign Trade Policy.

A vague explanation that an appeal was forwarded for approval and filed after approval, without a day-to-day account of delay, was treated as insufficient to justify condonation of a 332-day delay. On the substantive tax issue, supplies by a DTA unit to an EOU were treated as deemed exports, and refund of Terminal Excise Duty was recognised under the Foreign Trade Policy subject to the relevant policy conditions. The note applies the earlier Division Bench view mutatis mutandis and records that the refund claim was maintainable where entitlement was otherwise established.

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Issues: Whether the delay of 332 days in filing the appeal deserved condonation; and whether supplies made by a DTA unit to an EOU were entitled to refund of Terminal Excise Duty under the Foreign Trade Policy.

Issue (i): Whether the delay of 332 days in filing the appeal deserved condonation.

Analysis: The explanation offered for the delay was only a general statement that the matter was forwarded for approval and filed after obtaining approval. No day-to-day explanation for the delay was furnished.

Conclusion: The delay was not condoned and the issue was decided against the appellants.

Issue (ii): Whether supplies made by a DTA unit to an EOU were entitled to refund of Terminal Excise Duty under the Foreign Trade Policy.

Analysis: The controversy was treated as covered by the earlier Division Bench decision recognising that supplies to Export Oriented Units constituted deemed exports and that refund of Terminal Excise Duty was available under paragraph 8.3(c), subject to the conditions in paragraph 8.5. The Court also noted that the issue had already been decided and applied that view mutatis mutandis.

Conclusion: The refund claim was held to be maintainable and the issue was decided in favour of the respondent assessee.

Final Conclusion: The appeal failed in view of the refusal to condone delay and, on merits, the refund entitlement was upheld by applying the earlier binding view on deemed exports and Terminal Excise Duty refund.

Ratio Decidendi: Where supplies to an Export Oriented Unit qualify as deemed exports and the governing policy provisions recognise refund of Terminal Excise Duty, the amount cannot be retained if the entitlement is otherwise undisputed; a vague explanation is insufficient to justify substantial delay.

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