The court ruled that eligibility for deemed export benefits under the Foreign Trade Policy requires explicit endorsement as a sub-contractor in the Main Contract, which was not satisfied in this case.

JUDGMENT

Subramonium Prasad, J. The present LPA has been preferred by the Appellant, with prayers to set aside the Impugned Order dated 27.04.2022, passed by the Ld. Single Judge in W.P. (C) 1712/2021; with directions to the Respondents to refund Terminal Excise Duties for a sum of Rs.42,50,643/- under the Foreign Trade Policy 2009-14, in light of the Policy Circular No. 11/2015-20 dated 23.07.2018 issued by Respondent No. 2/DGFT.

2. The facts, in brief, leading up to the present LPA are that the Appellant/Delton Cables Ltd., a company registered under the Companies Act, 1956, is engaged in the business of manufacturing and supplying PVC and other categories of wires and cables for gas pipeline projects. The present dispute emanates out of a contract dated 20.12.2004, bearing No. BkTPP/12/(MP-3: INDIAN SUPPLY)/04-05, executed between Bharat Heavy Electricals Ltd. ("Main Contractor") and West Bengal Power Development Corporation Limited ("Project Authority") for supply of equipment and materials towards the establishment and setting up of Bakreswar Thermal Power Project, West Bengal. The Main Contract was entered into through the process of International Competitive Bidding ("ICB"). As per the conditions stipulated in the Main Contract, a Vendors List was issued on 11.02.2005. The list contains details of work orders for supply of materials for the purpose of establishing the Project. The Appellant is one such party whose name is mentioned against work orders to be executed. Subsequently, the Project Authority issued a Project Authority Certificate ("PAC") dated 05.04.2005, confirming BHEL to be the Main Contractor for the purpose of supplying materials and equipment to the Project. The document also mentions that the Project is to be sponsored by an international agency, i.e. the Japanese Bank for International Cooperation (JBIC) and that the process of awarding the contract should be through International Competitive Bidding procedure.

3. The cables and materials supplied by the Appellant are listed in entries against their names in the Vendors List dated 11.02.2005, issued by the Project Authority. It is established under clause 8.2(d) of the FTP 2009-14 that supply of materials to projects funded by foreign sponsoring agencies such as the JBIC are to be treated as Deemed Exports. Clause 8.2(d) of the FTP 2009-14 is reproduced below:

"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:

(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 (ICB) in accordance with procedures of those Agencies/Funds, where legal agreements provide for tender evaluation without including customs duty."

4. The Project Authority Certificate further states that the supplies in lieu of the Main Contract are to be made to a project sponsored by a foreign agency notified by the Department of Economic Affairs, Ministry of Finance, and that said supplies have to be made through the procedure of International Competitive Bidding approved by the said foreign agency. For reference, clause 1(a) of the Project Authority Certificate is reproduced as under:

"It is certified:

(a) That supplies under contract No.BkTPP/12/(MP-3: INDIAN SUPPLY)/04-05 dated 20.12.2004 are to be made in India to a project financed by multilateral o