Delhi HC grants refund of Terminal Excise Duty (TED) paid utilizing CENVAT credit towards supplies of goods to EOUs during the period January 2012 to April 2013; Rejects Revenue’s stand that such supplies being exempt from excise duty, no refund of TED shall be available in terms of Paras 8.2(b), 8.3 and 8.5 of FTP as amended w.e.f. April 18, 2013 vide Notification No. 4 (RE-2013)/2009-14; Holds that said amendment was substantive and could not be termed ‘clarificatory’ in view of unambiguous plain language thereof, while referring to SC decision in Kanak Exports to observe that Central Govt. could not be make substantive changes in FTP which had effect of taking away any vested right to claim refund of excise duty i.r.o. “deemed exports” prior to said date;
Accordingly, sets aside Policy Circular No. 16 (RE-2012)/2009-14 dated March 15, 2013 which sought to clarify that no refund of TED should be provided in cases where supplies of goods are ab initio exempted from excise duty, observing that same was clearly beyond the powers of DGFT; Referring to Division Bench ruling in Kandoi Metal Powders Mfg. Co. Pvt. Ltd., HC finds no merit in Revenue contention that assessee sought to circumvent provisions of CENVAT Credit Rules, observes, “The fact that the Cenvat Rules do not mention “deemed exports” would be of little relevance considering that paragraph 8.3(c) of the FTP expressly provided for refund of TED in cases of deemed exports.”
Citation: [TS-43-HC-2018(DEL)-FTP]