The Kerala High Court has held that even if inadvertently certain amount has been paid in a case where there is no provision in the Foreign Trade Policy for refund, the Government cannot unduly retain the amount. The case involved payment of Terminal Excise duty, after availing Cenvat credit, by the assessee-EOU while making certain clearances to another EOU. The High Court observed that the appellate authority ought to have examined the matter in the background that it is a welfare State and the Department/ Government do not indulge into profit making. The appellate authority was directed to decide the appeal afresh.
FULL TEXT OF THE HIGH COURT ORDER/JUDGEMENT
Through instant petition, challenge has been laid to an order Ext.P1 dated 15.01.2014 passed by the appellate Committee in Appeal No.12013/6/2013 preferred against the order dated 11.02.2013 of the Development Commissioner, Cochin Special Economic Zone. The short question involved in this case is if the petitioner who was not required to deposit Terminal Excise Duty (TED) for export of goods from one unit to another, can the authorities remain as a mute spectator is not refunding the amount on the ground of any provision in the Foreign Trade Regulation and Development Act, 1992 with consequential relief of refund or alternatively quashing Ext.P2 letter dated 5.11.2019.
2. The facts in brief are as follows: Petitioner, a private limited company, is engaged in the activity of manufacture of parts and accessories used for ATM machines (hereinafter referred as ‘goods’) classified under Chapter Heading 84 of erstwhile Central Excise Tariff Act,1985. It is an Export Oriented Unit (hereinafter called EOU)governed by Chapter 6 of the Foreign Trade Policy 2009-14. Petitioner holds a letter of permission dated 16.02.2010 issued by Cochin Special Economic Zone, which was renewed from time to time. Certain clearances to NCR Corporation Private Limited, Puducherry, another EOU during the period 2010-May,2011 vide 460 invoices were made on payment of applicable central excise duty and Central sales tax. While making the payment of central excise duty in respect of the said clearance, petitioner resorted to utillization of accumulated CENVAT Credit as evident from the tabulated form of invoices, duty tax Ext.P4.
3. Learned counsel appearing on behalf of the petitioner submitted the clearance of goods by petitioner to an EOU is considered at ‘deemed exports’ under the provisions of Para 8.2(b)of Foreign Trade Policy 2009-14, which is not disputed by respondents and during the relevant period, exemption from TED was given where the supplies are made against International Competitive Bidding (ICB) and for supplies made by an Advance Authorization holder to a manufacturer holding another Advance Authorization, if such manufacturer, in turn, supplies products to an ultimate exporter. Inadvertently the petitioner made the Terminal Excise Duty and as per Para 8.5 of the Foreign Trade policy (FTP), he was entitled to claim refund and accordingly submitted application for the relevant period as reflected from at page 5 and 6 of paper book (Ext.P7-P7(e)). But the same were erroneously rejected vide order dated 27th June, 2012 (Ext.P8). Petitioner vide Ext.P10 letter dated 27.12.2012 requested for an appealable speaking order in order to prefer an appeal before an appropriate authority. Show cause notice dated 10.01.2013 Ext.P11 was served, which was duly replied by Ext.P12 and accordingly, after affording opportunity of hearing vide order dated 11.02.2013 Ext.P13, claim was formally rejected. Petitioner preferred an appeal, the same has erroneously been rejected.
4. Mr. Ravi Raghavan, learned counsel appearing on behalf of the petitioner further submits that against the impugned order Ext.P1, petitioner preferred a Review Application on 22.03.2014 Ext.P15 and several reminders. As there was no response, RTI applications were preferred by the petitioner seeking the status of Review Application. On such application was replied vide Ext.P19(a) dated 5.11.2019, though it enclosed a communication of 30.06.2014 rejecting the claim of refund of the petitioner. Thus there is no delay and latches in approaching this Court in filing an appeal against the order Exts.P1 and P19. The order impugned Ext.P1 on the face of it lacks any reason for rejecting. There is no advertence to the arguments of the petitioner though the Development Commissioner noticed that petitioner had deposited the TED which is not required in case of deemed exports, but in the absence of the provision of refund in the foreign trade policy, claim was rejected.
5. Per contra, Smt.Krishna, learned counsel appearing on behalf of the respondent, on the last date of hearing on 19.10.2020 sought adjournment to enable her to obtain instructions with regard to the authenticity and veracity of the order Ext.P1 and submits that the Department is not averse in reconsideration of appeal Ext.P14.
6. I have heard learned counsel for the petitioner and the learned ASGI and CGC.
7. No doubt, under the different provisions of the Act, an alternative remedy has been provided for the affected parties to seek the vindication of the grievances, if any, but the quasi judicial authorities are also legitimately expected to take the congnizance of the matter in correct perspective by giving due consideration to the respective contentions and the law cited at the Bar, but should not pass an order in a most mechanical and sketchy manner, which is reflected from the impugned order Ext.P1. Development Commissioner in his order submitted that if the credit is availed, leavy certain, but if not availed, final goods are exempted, and in the absence of any provision of refund in the FTP, the case has been rejected. Once there was such finding, the Appellate Authority ought to have examined the matter in the background that it is a welfare State and the Department/ Government do not indulge into profit making. If inadvertently certain amount has been paid, even if there is no provision in the Foreign Trade Policy, Government cannot unduly retain the amount.
For the reason aforementioned, the impugned order Ext.P1 is set aside and the matter is remitted to the Appellate Authority by reviving the appeal Ext.P14. Appellate Authority is directed to decide the appeal afresh in accordance with law, by assigning reasons, but not in the manner as reflected above. Let this exercise be undertaken within a period of two months from the date of receipt of a certified copy of this judgment.
The writ petition stands disposed of.