HC : Refund of Terminal Excise Duty; Supplies to Chennai Metro Rail Project not exempt ab initio

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HC allows refund of Terminal Excise Duty (TED) to assessee, a sub-contractor, in respect of train sets supplied for Chennai Metro Rail Project funded by Japan International Cooperation Agency (JICA), in terms of Para 8.3 (c) and Para 8.4 (d) of FTP 2009-14; Rejects Revenue’s plea that supplies to projects funded by JICA, which was a notified organization for deemed exports benefit, against International Competitive Bidding (ICB) were eligible for ab-initio TED exemption under Para 8.3(c) and therefore, assessee’s refund claim was unjustified; Perusing Notification No. 12/2012-CE, HC observes that exemption was conditional upon availability of custom duty exemption, while Notification No. 12/2012-Cus extended duty exemption only to supplies made to specified contracts relating to Delhi Metro Rail Corporation, implying that goods supplied by assesses were ‘dutiable’; Consequently, HC holds that Revenue “proceeded on an entirely erroneous premise” as “exemption was not “ab initio” (i.e. per SE) exempt; it was conditional upon availability of customs duty exemption”,

while rejecting Revenue’s reliance on Policy Circular No.16 dated March 15, 2013; Also holds that TED refund shall be available in respect of supplies made after new FTP 2015-20 came into force, stating that bar prescribed under Para 7.05 (ii) is inapplicable as assessee’s case is outside restriction contained there under. Delhi HC

Citation – [TS-298-HC-2018(DEL)-FTP]