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High Court Of Calcutta
Y. R. Meena, Arun Kumar Mitra
JOINT DIRECTOR GENERAL OF FOREIGN TRADE - Appellant
Versus
IFGL REFRACTORIES LTD. - Respondent
Writ Petition 410 Of 2000
Decided On : 10/18/2001
EXIM POLICY - DUTY EXEMPTION SCHEME - REFUND OF TERMINAL EXCISE DUTY - APPLICABILITY - ENTITLEMENT OF HOLDER OF ADVANCE INTERMEDIATE LICENCE - INTERPRETATION OF PARA 122 OF CHAPTER X OF EXPORT AND IMPORT POLICY 1992-97.
Fact of the Case:
The petitioner, a manufacturer of refractory items used by Visakhapatnam Steel Plant (VSP) in the manufacture of steel products, which are exported abroad, held an Advance Intermediate Licence under the import policy. The petitioner supplied the refractory material to VSP under the duty exemption scheme as provided in paragraph 47 of the aforesaid policy. The petitioner paid the necessary Central Excise Duty for removal of goods from its factory to supply to the aforesaid exporter. The petitioner applied for exemption of Excise Duty, which was rejected. Thereafter, the petitioner applied to DGFT for refund of terminal Excise duty, which was also rejected on the ground that the petitioner was entitled to ab initio exemption of excise duty under Rule 13 of the Central Excise Rules, 1994 read with Notification No. 49/94, dated 22nd September, 1994.
Finding of the Court:
The Court held that the petitioner was entitled to the benefit of refund of terminal excise duty under Para 122 of the import policy. The Court observed that the petitioner had supplied the goods to VSP for the purpose of manufacturing of goods, meant for export under the Import and Export Policy. In such case, the exporter gets four types of benefits, which are given in paragraph 122 of the policy. The petitioner had applied for exemption of Excise Duty that was rejected and thereafter the appeal was filed and that has been withdrawn. Then the petitioner applied to D. G. F. T. , for refund of terminal Excise duty, which has been paid on the goods, which comes under the definition of 'deemed Exports'. That was also rejected by the DGFT that the petitioner is holder of advance intermediate licence under the import policy, when he has paid the excise duty and if the goods of petitioner are exempted from excise duty and the excise duty wrongly paid, the petitioner can ask for refund of the excise duty from Excise Department.
Issues: Whether the petitioner was entitled to the benefit of refund of terminal excise duty under Para 122 of the import policy.
Ratio Decidendi: The Court observed that the petitioner had supplied the goods to VSP for the purpose of manufacturing of goods, meant for export under the Import and Export Policy. In such case, the exporter gets four types of benefits, which are given in paragraph 122 of the policy. The petitioner had applied for exemption of Excise Duty that was rejected and thereafter the appeal was filed and that has been withdrawn. Then the petitioner applied to D. G. F. T. , for refund of terminal Excise duty, which has been paid on the goods, which comes under the definition of 'deemed Exports'. That was also rejected by the DGFT that the petitioner is holder of advance intermediate licence under the import policy, when he has paid the excise duty and if the goods of petitioner are exempted from excise duty and the excise duty wrongly paid, the petitioner can ask for refund of the excise duty from Excise Department. The Court held that merely the assessee's claim for exemption of duty and if that claim is rejected, does not deprive him from claiming the benefit given in Clause (c) in paragraph 122 i. e. refund of terminal excise duty. Both reliefs are given in different facts and circumstances and conditions to fulfil.
Final Decision: The Court dismissed the appeal and upheld the order of the learned single judge directing the authorities to refund the amount of excise duty paid by the respondent along with the interest @ 12% per annum and the interest will be computed from the date of passing of an impugned order.
( 1 ) THIS appeal is directed against the judgment of learned Single Judge dated 16th May, 2001 [2001 (132) E. L. T. 545 (Cal.)]. The limited controversy for our consideration in this appeal is whether the respondent is entitled for refund of terminal Excise Duty in accordance with the provisions of the import policy.
( 2 ) LEARNED Single Judge has considered the facts that the petitioner is a manufacturer of various items such as Tundish Nozzler, Tundish Shroud etc. , which are refractory items used by the Visakhapatnam Steel Plant (in short VSP) in the manufacture of steel products, which thereafter are exported abroad. VSP being an exporter is the holder of Advance Licence issued by the Director General of Foreign Trade (hereinafter referred to as DGFT) on the strength of which it can import various specified items including refractory items from abroad free of Customs Duty.
( 3 ) INSTEAD of importing such items from abroad it has chosen to procure such items from the petitioner who is the holder of an Advance Intermediate Licence under the import policy. The items manufactured by the petitioners are in the normal course subject to Central Excise Duty under the Excise Law. However, since the supply of the said items by the petitioner to VSP constitute 'deemed Report' within the meaning of the import policy the petitioner is entitled to certain benefits under the policy. One of such benefits is refund of terminal excise duty under the policy. So the petitioner duly applied for such refund of terminal excise duty from the DGFT being the respondent No. 2. The petitioner previously got refund for the quarters ending March, 1994, June, 1994 and September, 1994. However, this time the DGFT refused to entertain demand of refund for the succeeding quarters. The DGFT is of the view that the petitioner was entitled to ab initio exemption of excise duty under Rule 13 of the Central Excise Rules, 1994 read with Notification No. 49/94, dated 22nd September, 1994.
( 4 ) THE supplies by the petitioner to VSP had commenced prior to the issue of the said Notification No. 49/94. At that point of time Rule 191bb and Notification No. 33/90, dated April 1990, the provisions of which were substantially same as Rule 13 and Notification No. 49/94 were in force. In fact that petitioner had initially applied for exemption of excise duty under the earlier Rule and notification but the Central Excise Authorities rejected the same on the ground that the goods in question were not intermediate products nor raw materials for export and thereafter the excise authorities directed the petitioner to effect clearance to VSP on payment of Central Excise Duty.
( 5 ) THE petitioner though preferred an appeal against the order of the excise authorities but withdraw the same as the same became infructuous because of payment of excise duty by the petitioner. The petitioner made repeated demands and request for refund from the excise authorities; however the aforesaid authorities have declined to entertain such demand contending that such claim lay with the DGFT. The petitioner then submitted the petition for refund of duty to DGFT. The DGFT has also rejected the request for refund of duty.
( 6 ) PETITIONERS thereafter file the petition before this Court. Learned Single Judge thereafter considered the various provisions of the import policy and the paras of the Handbook. Learned Single Judge held that the respondent is entitled for refund of excise duty paid by it under Para 122 of the import policy and he directed the authorities to refund the amount of excise duty paid by the respondent along with the interest @ 12% per annum and the interest will be computed from the date of passing of an impugned order.
( 7 ) LEARNED Counsel for the appellant Mr. Roy submits that though the petitioner was entitled for exemption from the payment of excise duty, in respect of Mono-block supplied to VSP under Notification No. 49/94, dated 2nd September, 1994
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