Case Law Details
Combitic Global Caplet Pvt. Ltd Vs Union of India (Delhi High Court)
Conclusion: Assessee as an EOU was entitled to claim deemed export drawback on raw materials/inputs which remained unutilized with the then-existing DTA unit at the time of its conversion into a 100% EOU.
Held: In the instant case, after the conversion to 100% EOU unit had taken place, assessee claimed duty drawback qua custom duty component, on the premise that deemed export had taken place. An application was filed on 08.04.2013 by assessee claiming the duty drawback benefit for the period ending in September 2012, amounting to Rs.38,35,686/-. Assistant DC, however, had a different view and consequently, via order dated 10.05.2013 rejected assessee’s claim. The principal reason given by Assistant DC was that the claim for duty drawback (as a measure of deemed export benefit) could not be entertained, as the goods against which duty drawback was claimed, had been received in the unit, prior to it being declared an EOU. It was held that the outstanding export commitment under the advance authorization scheme qua the existing DTA unit was carried forward and fulfilled by the converted unit i.e., 100% EOU. Assessee had taken a definitive stand that under the Advance Authorization Scheme, at the time of conversion, out of 500kg of sulpiride powder imported, 206.520kg had been consumed and thus, the balance quantity i.e., 293.480 kg was transferred/supplied to its converted unit i.e., 100% EOU in terms of Appendix 14-I-O of the FTP. Besides this, assessee submitted that the Government of India had even allowed the transfer of the outstanding export commitment under the Advance Authorization Scheme, at the time of conversion of the existing DTA into 100% EOU. Having regard to the language oof HBP, assessee was right, that the restriction against the claim of concession in duties and taxes applied only vis-à-vis plant, machinery and equipment that had already been installed. Thus, the fact that assessee was allowed to carry forward the advance authorization to the converted unit i.e., 100% EOU and thereafter fulfil the outstanding export commitment would furnish a clue that duty drawback for such goods should extend qua unutilized goods, which were available at the time of conversion of the DTA unit into a 100% EOU.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This writ petition seeks to challenge Policy Circular No.9(RE-2013)/2009-14 dated 30.10.2013 [hereafter referred to as “2013 Circular”] and orders dated 26.04.2016 and 17.11.2016, passed by the Deputy Development Commissioner („Deputy DC’) and the Deputy Director General of Foreign Trade („Deputy DGFT’), respectively.
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