The judgment establishes that supplies qualifying as 'deemed exports' under the Foreign Trade Policy 2009-14 are entitled to refund of Terminal Excise Duty (TED), and that the CENVAT regime under the Central Excise Act is independent of the import-export policies framed under the 1992 Act.

S. Ravindra Bhat, J. (Open Court)

1. The petitioner challenges the respondents’ action in denying its refund claim in terms of the provisions of the Foreign Trade Policy 2009-14 framed under the Foreign Trade (Development and Regulation) Act, 1992.

2. The brief facts are that the petitioner inter alia manufactures metal powders which suffers excise duty. It claims to have supplied manufactured goods to 100% Export-oriented Units (EOUs) in consonance with the said Foreign Trade Policy (FTP). Claiming that it was entitled to refund of Terminal Excise Duty (TED) for the supplies made during two relevant periods – January 2012 to March 2012 and April 2012 to June 2012 - the writ petitioner made applications in this regard to the third respondent. The applications for refund were made on 29.08.2012 and 16.11.2012. The third respondent denied these refund claims by separate orders dated 19.10.2012 and 02.11.2012. In compliance with the provisions of the policy, the petitioner wrote to the second respondent, claiming relaxation, by two letters dated 27.12.2012 and 28.12.2012. These two were turned down on 14.05.2013.

3. It is contended by the petitioner that its unit and the supplies are entitled to be treated as “deemed export” – as defined by para 6.11 of the 2009 policy in question. Elaborating on this, it is submitted that by para 8.1, “deemed export” refers to categories of supplies outlined in para 8.2. The petitioner in this context relies on para 8.2(b) and goes on to claim the benefits of deemed export unit in terms of para 8.3(c). It is submitted that the benefit entitled to such deemed export units is spelt out in para 8.4. The relevant provision, i.e. the first column which deals with para 8.2 mentions the category falling within para 8.2(b). It is submitted that the benefit of exemption outlined in para 8.3(c) follows as a consequence of the affirmative mentioned in column (c) of para 8.4. Learned counsel highlighted that with effect from 01.04.2013, the policy has been further relaxed in that such category of units do not have to even deposit or pay TED but are entitled to claim complete exemption. He relies upon the relevant notification, i.e. 22/2003 dated 31.03.2003 in this regard. The relevant amendment carried-out by this circular to the earlier Foreign Trade Policy of 2009 in material particulars, i.e. para 8.4(b) clearly states in the last column that the unit is entitled to claim exemption from payment of TED.

4. Learned counsel for the respondents relied upon the averments in the counter affidavit as well as the letter addressed by the third respondent, of 31.05.2013, directing consequential instructions to be issued to field formations in the light of the amended circular dated 15.03.2013. It is submitted that in case the petitioner wishes to seek refund, the relevant statutory regime would be under the concerned provisions of Central Excise Act.

5. As is evident from the above discussion, the petitioner claims to be engaged in entirely deemed export – an assertion which is not essentially disputed. The entitlement of such units which supply goods to export oriented units is spelt-out in paras 6.11 and 8.1 of the 2009 policy. Para 8.2 to the extent it is relevant reads as follows:

“8.2 Categories of Supply

Following categories of supply of goods by main-sub-contractors shall be regarded as “Deemed Exports”:

(a) Supply of goods against Advance Authorisation/Advance Authorisation for annual requirement/DFIA;

(b) Supply of goods to EOU/STP/EHTP/BTP;

(c) Supply of capital goods to EPCG Authorisation holders;

XXXXXX XXXXXX XXXXXX”

6. The benefits for deemed export before its amendment from 01.04.2013 are outlined in paras 8.3 and 8.4 which read as follows:

“8.3 Benefits for Deemed Exports

Deemed exports shall be eligible for any/all of following benefits in respect of manufacture and supply of goods qualifying as deemed exports subject to terms and conditions as in HBPv1:-

(a) Advance Authorisation/Advance Authorisation