AI Drafter 
TaxTMI 
TaxTMI 
2018 (10) TMI 483
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....therein. 3. Nearly five years later, the respondents wrote a letter to the petitioner on 30.10.2013 stating that audit conducted had detected that the petitioner had been incorrectly granted reimbursement of CST paid on raw material, components, consumers' packing materials etc. purchased from units situated in Domestic Tariff Area ['DTA' for short]. According to the respondents, as per para 14-I-I of the handbook of procedures, an EOU would be entitled to reimbursement of CST in respect of only those purchases made from DTA which are used for production of goods meant for export or utilized for export services. The CST paid on raw materials etc purchased from DTA which are used in manufacture of goods sold in DTA would not be eligible for reimbursement of CST. 4. The petitioner replied to the said letter under communication dated 19.11.2013 contending inter alia that reimbursement of CST is granted under foreign trade policy 2004-09. Such substantive provision contained in the foreign trade policy did not envisage any restrictions on the right of reimbursement. The provisions contained in the handbook of procedures cannot override substantive provisions made in t....
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.... pointed out that the policy of the Government of India permitted every EOU to clear a certain percentage of his produce within the domestic area. The handbook of procedures cannot override this provision. He further submitted that the reimbursements were made as far back as in the year 2007-08. Show-cause notice for recovery was issued in the year 2016. There was thus gross delay in initiation of the proceedings. Heavy reliance was placed on the decision of Division Bench of this Court in case of Ashahi Songwon Colors Ltd. (supra) in support of both the contentions. Reliance is also placed on another decision of this Court in case of Jayant Agro Organics Limited vs. Union of India dated 25.04.2018 in Special Civil Application No. 3434 of 2018. In such judgement, the Court, relying on the decision in case of Ashahi Songwon Colors Ltd. (supra), quashed the demand primarily on the ground of delay and laches on part of the department. Counsel pointed out that the department's SLP against the judgement of Ashahi Songwon Colors Ltd.(supra) was dismissed by the Supreme Court. 10. On the other hand, learned counsel for the department resisted the petitions contending that the autho....
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....ment of Central Sales Tax (CST) paid by them on purchases made from the Domestic Tariff Area (DTA), for production of goods and services as per EOU Scheme on the following terms and conditions: (a) The supplies from DTA to EOU/EHTP/STP units must be utilized by them for production of goods meant for export and/or utilized for export of services and may include raw material handling equipment etc. on which CST has been actually paid by the EOU/EHTP/STP." 14. The respondents therefore rely on this condition to contend that there was erroneous reimbursement of central sales tax to the petitioners for the goods procured from DTA units which were utilized for manufacture of goods not for export but for clearances in the local market. In this context, the main argument of the petitioners is that the procedure laid down by the Government of India for granting reimbursement of central sales tax, cannot contain a condition which will curtail the right granted in the substantive provision contained in the Foreign Trade Policy. 15. Under very circumstances, such an argument came to be considered by this Court in case of Ashahi Songwon Colors Ltd.(supra). It was a case in which,....
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....se(c) did not use any expression that the same would be confined to a sale by a DTA unit. Clause (c) starts with the expression "In addition, EOU/EHTP/STP/BTP units shall be entitled to the following". Subcause (i) of clause(c) provides for reimbursement of Central Sales Tax (CST) on goods manufactured in India. Subclause(ii) provides for exemption from payment of Central Excise Duty on goods procured from DTA on goods manufactured in India. 18. A minute scrutiny of these provisions contained in para. 6.11 would reveal that the language used in clauses (a), (b) and (c), in general, was not made limited to the supplies from a DTA unit. As noted, clauses(a) and (b) both confined their application to the supplies made by the DTA unit. Clause(c) itself contained two situations. In subclause(i) what was envisaged was reimbursement of CST on goods manufactured in India. Subclause (ii) envisaged exemption from payment of CST on goods purchased from DTA on goods manufactured in India. Thus the policy wherever intended to limit the benefit of an EOU on procurement made from a DTA unit, it was so specifically provided. When therefore, subclause(i) of clause (c) of para 6.11 did not make a....
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.... which is not permissible in view of the fact that no power has been granted to the DGFT under the FTDR Act to legislate either directly or by way of incorporation by reference. It is now a settled law that the separation of power between the legislature and executive forms part of the basic structure of the Constitution of India and any attempts by the executives to legislate without appropriate authority under the law would amount to violation of the basic structure of the Constitution of India. The power to legislate is incorporated under Article 246 of the Constitution of India and such power has been conferred on the Parliament and the State Legislature. Moreover, the power to frame Duty Draw Back Rules under the FTDR Act can be legislated by the Central Government only in exercise of power conferred under Section 19 in the manner prescribed under the FTDR Act and the same cannot be delegated to the Respondent no. 2 as expressly prohibited by Section 6(3) of the above Act. 29. We, thus, find that any attempt by the executives to legislate without the authority of law should be branded as a colourable device and therefore, the same is in violation of Article 246 of the Const....