A single bench of the Madras High Court held that the payment of Terminal Excise Duty (TED) altogether cannot be a valid reason for denying refund to the assessee under the excise law. The Court was hearing a bunch of Writ Petitions were filed by M/s Same Deutz-FahrIndia (P) Ltd against the Excise Authorities.
The Petitioner had filed writ petitions praying for quashing a Policy Circular No.16 (RE-2012/2009-14)dated 15.03.2013 issued by the Director General of Foreign Trade and for directing the Development Commissioner to sanction refund of Terminal Excise Duty to the petitioner.
The policy circular states that in cases where the relevant taxes should not have been collected at the beginning, if there has been an error or oversight committed, then the agency collecting the tax would refund it, rather than seeking reimbursement from another agency. On the basis of the above circular, the authorities had taken a stand that refund cannot be allowed for payment of tax in respect of supplies, the supply of goods under invalidation letter issued against the Advance Authorisation; supply of goods under ICB and supply of goods to EOU. According to them, such supplies are ab-initio exempted from payment of excise duty.
The same issue had come up before the Judge of this Bench, Justice T.S Sivagnanam in M/s. Lenovo (India) Pvt. Ltd. vs. Union of India & Ors. W.P Nos. 23507 to 23509 of 2014. Reaffirming his decision in that case, Justice T.S Sivagnanam also noticed that the issue was covered by the decision of the Delhi High Court in the case of Kondoi Metal Powers Mft. Co. Pvt. Ltd., V. Unkon Of India [2014 (302) E.L.T. 209(Del).
The Single bench allowed the Writ petitions and held that subsequent amendment was made to the existing regime which in effect liberalised the position further and exempted payment of TED altogether cannot surely be a reason for denying the scheme for refund of payment already made.
