The Court held that a dealer can choose between exemption and refund of duty if both are available. Applying Supreme Court precedents, the writ petition allowed, impugned orders quashed, and refund ordered.
Writ petition allowed; impugned orders quashed; respondent directed to refund terminal excise duty within four weeks.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 16.09.2019
CORAM
THE HONOURABLE Dr. JUSTICE ANITA SUMANTH W.P.No.23194 of 2009
M/s.Manali Petrochemical Limited, Represented by is Head (Accounts), E.N.Rangaswami, Ponneri High Road, Manali, Chennai 600 068. .. Petitioner
Vs.
1.The Addl. Director General of Foreign Trade, Ministry of Commerce & Industry, Udyog Bhavan, New Delhi.
2.The Zonal Joint Director General of Foreign Trade, Shastri Bhavan, CPWD Annexe Building, 4th floor,
No.26, Haddows Road, Chennai – 600 006. .. Respondents
Prayer:- Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records comprised in Order No.F.No.11/3/2009-10ECA.I/1808 dated 23.09.2009 on the file of the first respondent, quash the same and consequently direct the second respondent to refund the Terminal excise duty paid by the petitioner.
For Petitioner : Ms.P.Jayalakshmi
For Respondents : Mr.Dr.G.Babu Central Government Standing Counsel
The petitioner has challenged an order dated 23.09.2009 passed by the Additional Director General of Foreign Trade (in short R1) rejecting its claim for refund of terminal excise duty paid and confirming the order passed by the 2nd respondent, the Zonal Joint Director General of Foreign Trade (R2).
2.The petitioner was awarded a contract for supply of 400 Metric Tonnes of Composite Polyol - 78 for onward supply to Oil and Natural Gas Commission, against its purchase order. The supply was in connection with petroleum operations undertaken https://hcservices.ecourts.gov.in/hcservices/ under petroleum exploration licenses/mining leases and were conducted on international competitive bidding, in line with the provisions of paragraph 8.2(f) and 8.4.4 (iii) of the Foreign
Trade Policy (in short FTP) stating as follows: 'CHAPTER-8
DEEMED EXPORTS
........
Categories of Supply 8.2 .....
.....
.....
.....
.....
(f) Supply of goods to
any project or purpose
in respect of which the
MoF, by a notification,
permits import of such
goods at zero customs
duty;
.....
(h) ....
(i) Supply to projects
funded by UN
agencies; and
(j) Supply of goods to
nuclear power projects
through competitive
bidding as opposed to
ICB.
Benefits to the Supplier 8.4.1 .....
.....
.....
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.
(ii) In respect of supplies mentioned in paragraph 8.2(d), supplies to projects funded by such agencies alone, as may be notified by DEA, MoF, shall be eligible for deemed export benefits. A list of such agencies/funds is given in Appendix 13 of HBP v1.
(iii) Benefits of deemed exports under para 8.2(f) of FTP shall be applicable in respect of items, import of which
is allowed by DoR at zero customs duty subject to fulfillment of conditions specified under Notification No.21/2002-Customs dated 1.3.2002, as amended from time to time.'
'It is certified:That supply of goods required in connection with petroleum operations undertaken under petroleum exploration licences or mining leases under international competitive bidding is made in accordance with the provisions of paragraph 8.2 (f) and 8.4.4 (iii) of the policy and the import content of the order Rs. NIL.
PARTICULARS OF SUPPLIES TO BE MADE-FOR ELIGIBLE PEL/ML AREA.
---------------------------------------------------------------------------Sr. Description of Qty Total order No. (Exworks) Item in KG Value (in Rs.) -----------------------------------------------------
4.The claim for refund before the 2nd respondent was dismissed on the ground that since there was an exemption from terminal excise duty, the petitioner is not entitled to the claim of refund, as sought. In appeal, this conclusion was reiterated by the appellate authority. It is relevant to state, as a fact, that both the original as well as appellate https://hcservices.ecourts.gov.in/hcservices/ authorities have concurred with the petitioner that the methodology for supply has been only through international competitive bidding.
6.The relevant provisions of the Foreign Trade Policy make it apparent, in my view, that the benefit of deemed export is available in where the MoF has, by Notification, permitted import at zero customs duty, if the suppliers were pursuant to the procedure of ICB.
'The question in these appeals is covered in favour of the appellant by the order of this Court in Collector of Central Excise, Baroda v. Indian Petro Chemicals [1997 (92) E.L.T. 13]. Where there are two exemption notifications that cover the goods in question, the assessee is entitled to the benefit of that exemption notification which gives him greater relief, regardless of the fact that that notification is general in its terms and the other notification is more specific to the goods.
10.I find no merit in the stand of the revenue and this writ petition is allowed. Consequently, the refund shall be paid over within a period of four weeks from date of receipt of a copy of this order. No costs.
Sd/-
Assistant Registrar(CS)
//True Copy//
Sub Assistant Registrar
vs
To
1.The Additional Director General of Foreign Trade,
Ministry of Commerce & Industry,
Udyog Bhavan, New Delhi.
2.The Zonal Joint Director General of Foreign Trade,
Shastri Bhavan, CPWD Annexe Building, 4 th floor,
No.26, Haddows Road, Chennai – 600 006.
+1cc to Mr.S,Muthu venkateswaran , Advocate SR.No. 79271
+1cc to Mr.G.Babu , Advocate SR.No. 79440
+1cc to Mr.G.Babu , Advocate SR.No. 79440 (20/01/2020)
W.P.No.23194 of 2009
A.SK(18/12/2019)
2 issues framed by the court
Whether a dealer is entitled to claim refund of terminal excise duty when the goods supplied under deemed export category are also exempt from duty.
Whether the writ jurisdiction can be invoked to quash the order rejecting the refund claim given the existence of a statutory revision remedy.
Colour shows how this judgement treated each authority
H.C.L. Limited vs. Collector of Customs, New Delhi (130 E.L.T. 405)Explained¶31
Collector of Central Excise, Baroda v. Indian Petro Chemicals [1997 (92) E.L.T. 13]Followed¶31
Lenovo (India) Pvt. Ltd. Vs. Union of India [2017 (346) E.L.T. 12 (Mad.)]Followed¶34
M/s Agnice Fire Protection Limited Vs. The Additional General of Foreign Trade Ministry of Commerce and Industry, Zonal Joint Director General of Foreign Trade Followed¶34
SAME DEUTZ-FAHR INDIA (P) Ltd. Vs. Union of India [2017(12) TMI 1114]Followed¶34
4 provisions across 3 enactments
M/s. Manali Petrochemical Limited
The Addl. Director General of Foreign Trade, Ministry of Commerce & Industry
The Zonal Joint Director General of Foreign Trade
Dr. Justice Anita Sumanth
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
