Delhi High Court
M/S. Delton Cables Limited vs Union Of India & Ors. on 3 December, 2015
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 03rd December, 2015
+ W.P.(C) 6438/2013
M/S. DELTON CABLES LIMITED ..... Petitioner
Through: Mr. Manoj Ohri, Sr. Advocate
with Mr. P.C. Patnaik,
Advocate.
versus
UNION OF INDIA & ORS. ..... Respondents
Through: Mr. Sanjeev Narula with Ajay
Kalra, Advocates for R-1 to R-4.
Mr. Rupesh Kumar, Advocate
for R-6.
CORAM:
HON'BLE MR. JUSTICE VED PRAKASH VAISH
VED PRAKASH VAISH, J. (ORAL)
1. The petitioner has filed the present petition under Articles 226 of
the Constitution of India seeking directions to the respondents that the
respondent No.4, Policy Relaxation Committee (PRC) may pass an
appropriate order to refund the Terminal Excise Duty (TED)
amounting to Rs.42,50,643/- (Rupees Forty two lakhs fifty thousand
six hundred forty three) as per the provisions of the Foreign Trade
Policy (FTP) along with interest @ 18% per annum. The petitioner
also seeks directions to the PRC, respondent No.4 to reconsider the
application for sanction of terminal excise duty and give personal
hearing to the petitioner. The petitioner also seeks quashing of order
dated 12.02.2013 issued by respondent No.4 and policy circular dated
15.03.2013 issued by respondent No.2 and letter dated 07.07.2013
issued by respondent No.4.
2. In a nut shell the facts of the case as set out in the petition are
that the petitioner is a public limited company registered under the
Companies Act, 1956, which is pioneered in manufacture of PVC
wires and cables. The petitioner company is also engaged in, inter alia,
developing cable technology, power distribution, applications and
power management solutions used in refinery, oil and gas processing
sites, chemical and fertilizer sites, power generation, transportation and
urban development applications. On 20.12.2004, a contract was
executed between West Bengal Power Development Corporation Ltd.
(Project Authority) and Bharat Heavy Electricals Ltd. (BHEL) (Project
Authority) for supply of equipments and materials. A project authority
certificate was issued by the West Bengal Power Development
Corporation Ltd. (Project Authority). On 25th April, 2007 in an
extension to the said contract, a certificate dated 05.04.2005 was issued
by the project authority to the main contractor.
3. In furtherance of the aforesaid contract, numerous purchase
orders were received by the petitioner from the main contractor for the
said project. Accordingly, the petitioner company made supplies and
payments were received. During the delivery of said supplies, the
petitioner company erroneously paid excise duty to the tune of
Rs.42,50,643/- (Rupees Forty two lakhs fifty thousand six hundred
forty three). The petitioner moved an application to respondent No.3
for refund of Terminal Excise Duty (TED), which was erroneously
paid to the excise department. The respondent No.3, vide letter dated
25.05.2011 informed the petitioner that the petitioner company is not
eligible for refund of TED since its name is not mentioned in the
contract dated 20.12.2004. Aggrieved by the said letter, the petitioner
made representation dated 04.08.2011 and 19.09.2011. The petitioner
also submitted the project authorty's letter dated 21.07.2011 wherein it
was stated that M/s. Delton Cables Ltd. was duly appointed as Sub-
Contractor by M/s. BHEL, the main contractor for the said project.
4. The issue of the petitioner regarding refund of TED was referred
to the Director General of Foreign Trade (DGFT), Ministry of
Commerce and Industry. Vide impugned order dated 12.02.2013,
respondent No.4 observed that the name of petitioner has not been
mentioned in the contract as sub-contractor, hence, the condition of
para 8.6.2 of FTP has not been complied with. It was also observed
that the supply was under ICB contract which has been exempted ab-
initio from payment of terminal excise duty, hence, refund cannot be
allowed.
5. Learned senior counsel for the petitioner urges that respondent
No.6 who was the main contractor had appointed the petitioner as the
sub-contractor and the name of petitioner has been mentioned in the
Vendor list. Learned senior counsel for the petitioner also pointed out
that Policy Relaxation Committee (PRC) had allowed the refund of
TED to M/s. Gamon India Ltd. in its meeting held on 29.05.2012. The
refund of TED was also allowed to M/s. Voltamp Transformers Ltd. on
10.07.2012.
6. Before examining the merits of the case, it is necessary to
consider the relevant provisions of the Central Excise Act, 1944
(hereinafter referred to as the 'Act'). Section 5A of the Act empowers
the Central Government to grant exemption from duty of excise either
absolutely or subject to such conditions as may be specified. In
exercise of the powers conferred under Section 5A of the Act, the
Central Government issued notification dated 01.03.2006. As per
entry 91 of the said notification, all goods supplied against
international competitive bidding are exempted from duty of excise.
7. The Central Govt. in exercise of the powers conferred by
Section 5 of the Foreign Trade (Development & Regulation) Act, 1992
(FTDR Act) issued Export and Import Policy 2004-2009. The Chapter
8 of the said policy provides for 'deemed exports' specified therein.
8. A similar question came up for consideration before Hon'ble
Division Bench of this Court in LPA No.192/2015 and LPA
No.196/2015 titled as 'Union of India & Ors. vs. Alstom India Ltd.'
decided on 28.07.2015. In the said case, writ petition bearing W.P.(C)
No.1331/2015 was filed by M/s. Alstom India Ltd. claiming refund of
TED which was rejected by the Director General of Foreign Trade,
Ministry of Commerce and Industry. The said petition was disposed of
by learned Single Judge on 11.02.2015. Thereafter, an appeal being
LPA No.192/2015 was preferred. The Hon'ble Division Bench after
considering the relevant provisions of the Act and the policy directed
DGFT to consider the application of the writ petitioner for refund in
terms of the provisions of the FTP, 2009-2014 and pass an appropriate
order in accordance with law.
9. Learned counsel for both the parties have agreed that a similar
direction may be issued in the present case.
10. In view of the above, the petition is disposed of with the
direction that respondent No.3, DGFT will consider the application of
the petitioner for refund in terms of the provisions of the FTP, 2004-
2009 and pass an appropriate order in accordance with law
uninfluenced by the impugned order dated 12.02.2013. The
respondent No.3 will also consider the order passed on 29.05.2012 in
the case of M/s. Gamon India Ltd. and order dated 10.07.2012 in the
case of M/s. Voltamp Transformers Ltd. The respondent No.3 shall
afford an opportunity of hearing to the petitioner and pass an
appropriate order expeditiously and preferably within a period of eight
weeks from today in accordance with law.
11. The petition stands disposed of accordingly. No order as to
costs.
(VED PRAKASH VAISH)
JUDGE
DECEMBER 03rd, 2015
hs
