Court grants 'deemed exports' benefit, quashes order, directs authorities to comply with Foreign Trade Policy

The Court allowed the writ petition, quashing the impugned order and directing the authorities to grant the benefit of 'deemed exports' for calculating the value of exports in accordance with the Foreign Trade Policy. The petitioner was held entitled to the benefit of 'deemed exports' for the specified period, and consequential steps were to be taken within two months.

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Issues involved:
The judgment addresses the entitlement to the benefit of 'deemed exports' while calculating the free onboard value of exports in terms of paragraph 6.8(a) of the Foreign Trade Policy for the relevant period.

Summary:

Issue 1: Entitlement to Benefit of 'Deemed Exports'

The petitioner, a Company incorporated under the Companies Act, 1956, claimed to be an Export Oriented Unit with permission to import and export products under the Foreign Trade Policy. The petitioner cleared goods under the Domestic Tariff Area (DTA) Sale from October 2005 to December 2007, paying excise duty. A show cause notice was issued alleging excess clearance beyond the prescribed limit. The petitioner argued that since the sale was covered under 'deemed exports', no extra excise duty was due. Despite a clarification submitted, an order was passed holding the petitioner liable for differential duty. The petitioner challenged this order seeking entitlement to the benefit of 'deemed exports' for calculating the value of exports.

Issue 2: Consideration of Writ Petition Post Supreme Court Decision

The consideration of the writ petition was deferred pending a similar issue being considered by the Honorable Supreme Court in a Special Leave Petition. Following the Supreme Court's decision in the related case, the writ petition was taken up for consideration.

Issue 3: Legal Arguments and Court's Decision

The petitioner's counsel argued that the Supreme Court's decision in the related case favored the petitioner's entitlement to the benefit of 'deemed exports'. The Deputy Solicitor General of India concurred, acknowledging the removal of the distinction between 'deemed exports' and physical exports for the relevant period. The Court, after reviewing the Supreme Court's decision, found that the petitioner was entitled to the benefit of 'deemed exports' based on the application process and relevant policy provisions. The Development Commissioner's order denying relief on the grounds of ineligibility for DTA Sale with regard to 'deemed exports' was set aside.

Conclusion

The Court allowed the writ petition, quashing the impugned order and directing the authorities to grant the benefit of 'deemed exports' for calculating the value of exports in accordance with the Foreign Trade Policy. The petitioner was held entitled to the benefit of 'deemed exports' for the specified period, and consequential steps were to be taken within two months.

This summary provides a detailed overview of the judgment, highlighting the issues involved, legal arguments presented, and the Court's decision in each aspect.

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