AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 1012
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....cy circular No. 11/2015-20 dated 23th July, 2018 issued by Director General of Foreign Trade. We, accordingly permitted the Respondents' counsel to take instruction on this aspect. Today, Ms. Shiva Lakshmi, CGSC on instructions states that petitioner's claim is distinguishable from the case of M/s Alstom Transport India Limited (supra) and opposes the petition. She also states that the respondents have waived their right to file a counter affidavit. In these circumstances, we have proceeded to hear the matter on merits. The subject matter of the present petition is indeed covered by the decision rendered by this Court in M/s Alstom Transport India Limited (supra) for the reasons discussed and deliberated hereinafter. Nevertheless, we have independently examined the facts of the case. 3. Briefly stated, the petitioner - M/s Multitex Filtration Engineers Limited, holding excise registration, is a company inter alia engaged in the business of manufacturing industrial filtration equipment for oil, gas, etc. It was appointed as sub-contractor to supply equipment to power generating companies for the setting up of various power projects. In relation to the purchase orders placed by EP....
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....lated under para 8.2 (f) would be available. Petitioner submits that since it was a regular practice of the Excise Department to deny the excise duty exemption on the sole basis that the preconditions of furnishing an essential certificate, as is necessary for availing customs duty exemption on imported goods was never furnished, petitioner instead paid the duty and thereafter claimed refund in respect of such duties as per the terms of the scheme. 5. Respondent No.3 rejected the refund applications vide letter dated 31st March, 2014 placing reliance upon Circular No. 16 dated 15th March, 2013 and contending that as supplies against ICB are ab initio exempted from payment of excise duty, the same are ineligible for refund. 6. Aggrieved by the aforesaid rejection, petitioner vide letter dated 26th August, 2014 approached DGFT -Respondent No. 2. No action was taken on this representation. Thereafter, petitioner engaged in multiple correspondences with various officials of the respondents, repeatedly requesting for refund of TED. Such requests were not acted upon or responded to. Eventually, Deputy Director General of Foreign Trade (Respondent No. 4) vide a letter dated 31st Mar....
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.... 9. We have given our thoughtful consideration to the submissions advanced by learned counsel for the parties. The controversy in the present case surrounds the conditions of the FTP and it would thus be apposite to extract relevant paragraphs of the relevant FTP 2009-14 applicable to the period during which the supplies were made by the petitioner. Paragraph 8.2 of the FTP as it existed at the relevant time reads as under: "8.2 Following categories of supply of goods by main /subcontractors shall be regarded as "Deemed Exports" under FTP, provided goods are manufactured in India: (a) Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement /DFIA; (b) Supply of goods to EOU I STP I EHTP I BTP; (c) Supply of capital goods to EPCG Authorisation holders; (d) Supply of goods to projects financed by multilateral or bilateral Agencies/Funds as notified by Department of Economic Affairs (DEA), MoF under International Competitive Bidding (JCB) in accordance with procedures of those Agencies I Funds, where legal agreements provide for tender evaluation without including customs duty; Supply and installati....
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....es made by an Advance Authorisation holder to a manufacturer holding another Advance Authorization if such manufacturer, in turn, supplies the product(s) to an ultimate exporter. 8.4. Benefits to the Supplier ... 8.4.4 (i) In respect of supplies made under paragraphs 8.2(d), (f) and (g) of FTP, supplier shall be entitled to benefits listed in paragraphs 8.3(a), (b) and (c), whichever is applicable. ... (iv) Supply of Capital goods and spares upto 10% of FOR value of capital goods to power projects in terms of paragraph 8.2(g), shall be entitled for deemed export benefits provided the ICB procedures have been followed at Independent Power Producer (IPP) / Engineering and Procurement Contract (EPC) stage. Benefit of deemed exports shall also be available for, renovation I modernization of power plants. Supplier shall be eligible for benefits listed in paragraph 8.3(a) and (b) of FTP, whichever is applicable. However, supply of goods required for setting up of any mega power project as specified in S.No. 400 of DoR Notification No. 21/2002-Customs dated 1.3.2002, as amended, shall be eligible for deemed export benefits as mentioned in parag....
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..../41/AM-09/PC-VI)" (emphasis supplied) 12. The reasoning of the respondents for rejecting the refund is palpably and inherently fallacious. Under Central Excise Notification No. 6/2006-CE dated 1st March, 2006, Entry 91 exempts all goods supplied against ICB subject to condition No. 19, which prescribes that the goods must be exempted from levy of customs under First Schedule to the Customs Tariff Act, 1975 as also the additional duty leviable under Section 3 of the Customs Tariff Act, 1975. Entry No. 91 along with the condition No. 19 is reproduced hereinbelow: 91 Any chapter All goods supplied against International Competitive Bidding Nil 19 CONDITION 19 If the goods are exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under section 3 of the said Customs Tariff Act when imported into India. 13. It is thus clearly discernible by a plain reading of the aforesaid conditions that in order to be entitled to exemption of excise duty, the goods are to be necessarily exempted from customs duty as well. The supplies made to....
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....ar. The presumption drawn by the respondents to deny refund exhibits unconditional latitude which is an erroneous understanding of the provisions of the FTP. Merely on the assumption that since the supplies made is under ICB, they are not eligible for refund of TED is an erroneous assumption. Petitioner has demonstrated that there can be several supplies which may qualify to be supplies under ICB, yet not be eligible for excise duty exemption on account of the fact that they are not eligible for customs duty exemption. Even though the supplies made by the petitioner fall under ICB, it does not ipso facto mean that they are not supplies under the excise notification. Ergo, since the supplies do not qualify as ab initio exempted supplies, the impugned circular dated 15th March, 2013 could not be invoked by the Respondents so as to deny the refunds. The rejection has no legal or sound reasoning and is not in consonance with the FTP, and is liable to be set aside. 14. Now coming to the supplies made to Oil India Limited, mentioned at serial No. (iii) in paragraph 3 of this order, we feel that the petitioner should also be given similar relief in respect of the supplies thereof, sinc....
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....)/DEA/2010 dated 05.05.2010 notified six organizations viz. International Bank of Reconstruction and Development (IBRD) & International Development Association (IDA), International Fund for Agricultural Development (IF AD), Asian Development Bank (ADB) Organization of Petroleum Exporting Countries (OPEC). Yet credit channelized through Japan International Co operational Agency (JICA) [Development component only] and Swedish international development agency (SIDA) for the purpose of deemed export benefits under para 8.2(d) of FTP, 2009-14 subject to the condition that the supplies to projects were made under ICB procedure only. To give effect to the DEA's Public Notice, DGFT vide Public Notice No. 67 on 25th May, 2010 incorporated these agencies in the Appendix 13 of HBP Vol. I appearing in para 8.2(d) of FTP 2009-14 to be eligible for deemed export benefits under para 8.3 of FTP 2009-14. 2. However, the deemed export benefits for supplies made to the projects funded by these agencies were discontinued in the new FTP 2015-20 notified on 1.4.2015 and only three agencies viz. International Bank of Reconstruction and Development (IBRD) and International Development Associa....
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.... (other than IBRD, IDA and ADB) notified vide DGFT's Public Notice No.67 on 25th May, 2010 for supplies made upto 31.3.2015. 6. All the Regional Authorities are advised to dispose the claims of applicants for the supplies made up to 31.03.2015 under para 8.2(d) of FTP 2009-14 by way of refund of Terminal Excise Duty (TED) for the. projects funded by JICA etc. (other than IBRD, IDA and ADB) provided those supplies are otherwise eligible under FTP, 2009-14. 7. This issues with approval of Competent Authority. (Shobhit Gupta) Deputy Director General of Foreign Trade Tel. No. 23061562 Ext 341 [email protected] [Issued from File No. 01/92/180/16/AM-15/PC-VI]" (emphasis supplied) 16. In terms of the above circular, it appears that DGFT has now identified the issue viz-a-viz the non-refund of excise duty paid by the suppliers. This circular in our view now recognizes the provisions of the FTP in the right perspective, that exemption from TED was not available for certain supplies even though the same were under ICB. There is thus no impediment in granting the refund to the Petitioner. In view of the above discussion, we hold that the impugned cir....