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of <h1>Court denies refund of Terminal Excise Duty under Foreign Trade Policy 2009-14 for failure to meet subcontractor endorsement requirement.</h1> <h3>M/s. Delton Cables Limited Versus Union Of India & Ors.</h3> M/s. Delton Cables Limited Versus Union Of India & Ors. - TMI Issues Involved:1. Eligibility for refund of Terminal Excise Duty (TED) under the Foreign Trade Policy (FTP) 2009-14.2. Recognition of the Appellant as a sub-contractor under the Main Contract.3. Interpretation and implementation of FTP provisions by the DGFT.4. Application of Policy Circular No. 11/2015-20 dated 23.07.2018.Detailed Analysis:1. Eligibility for refund of Terminal Excise Duty (TED) under the Foreign Trade Policy (FTP) 2009-14:The Appellant sought a refund of TED amounting to Rs. 42,50,643/- under the FTP 2009-14, claiming that the supplies made to the Bakreswar Thermal Power Project were deemed exports. The relevant provisions cited include Clause 8.2(d) of the FTP 2009-14, which considers supplies to projects financed by international agencies as deemed exports. However, the DGFT and other authorities rejected the refund claim, stating that the supplies were made under an International Competitive Bidding (ICB) contract, which exempts payment of excise duties ab-initio as per Clause 8.3(c) of the FTP 2009-14.2. Recognition of the Appellant as a sub-contractor under the Main Contract:The Appellant contended that they were recognized as a sub-contractor by the Main Contractor (BHEL) and included in the Vendors List dated 11.02.2005. However, the authorities and the court emphasized that for deemed export benefits, the Appellant's name must be endorsed as a sub-contractor in the Main Contract or subsequent documents before the supply of goods, as per Clause 8.6.2 of the FTP 2009-14. The Appellant failed to provide such endorsement by the Project Authority (WBPDCL).3. Interpretation and implementation of FTP provisions by the DGFT:The DGFT, empowered under Section 6(2) of the Foreign Trade (Development and Regulation) Act, 1992, interpreted the FTP provisions and rejected the Appellant's claim. The DGFT's Policy Interpretation Committee clarified that only supplies made by entities directly endorsed as sub-contractors in the Main Contract are eligible for deemed export benefits. The court upheld the DGFT's interpretation, noting that the Appellant did not meet the necessary criteria.4. Application of Policy Circular No. 11/2015-20 dated 23.07.2018:The Appellant argued that the Policy Circular dated 23.07.2018 clarified that JBIC-funded projects are entitled to deemed export benefits. However, the authorities and the court found that this circular did not apply to the Appellant's case, as it did not alter the requirement for endorsement as a sub-contractor in the Main Contract. The court noted that the Appellant's reliance on the circular and subsequent clarifications did not satisfy the conditions laid out in the FTP 2009-14.Conclusion:The court concluded that the Appellant was not eligible for the refund of TED under the FTP 2009-14. The Appellant failed to provide necessary endorsement as a sub-contractor in the Main Contract, and the supplies were made under an ICB contract exempting TED ab-initio. The DGFT's interpretation and the findings of the Ld. Single Judge were upheld, and the appeal was dismissed.
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