SIMPLEX INFRASTRUCTURE LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS writ petition impugns the legality of orders demanding the recovery of terminal excise duty ("TED") of Rs. 12,26,55,979 earlier refunded to the petitioner, Simplex Infrastructure ("Simplex").

(2.) SIMPLEX provides construction services, and has been awarded various civil works contracts. For the execution of these projects, Simplex procured construction goods from local manufacturers. The local manufacturers paid excise duty to the Revenue on the goods supplied to Simplex, and in turn, passed on the burden of the excuse duty to Simplex. The claim for refund of the TED was thus claimed by Simplex. This claim was made under Paragraph 8.2 of the Foreign Trade Policy ("the policy") of the Central Government, made under the Foreign Trade (Development and Regulation Act), 1992, (hereafter "the Act") which provides various benefits in relation to ,,deemed exports. This refers to those transactions in which goods supplied do not leave the country, but fiscal benefits attached to exports are provided nonetheless. The intention thus is to treat supplies to such projects are equivalent to exports, with the same benefits. Paragraph 8.3 of the policy lists refund of TED as one of the benefits that may be claimed. Accordingly, Simplex filed applications for refund of TED, in the requisite ANF 8 forms. After the removal of deficiencies, the refund was granted. The refund against these applications was sanctioned for the period of 12th May, 2010 to 8th March, 2011, for an amount of Rs. 12,26,55,979, which was released on 29th March, 2011.

(3.) THE background of the impugned orders becomes clear from the meeting of the Policy Interpretation Committee ("PIC") under the aegis of the DGFT, held on 15th March, 2011. In relation to non -mega power projects, the PIC clarified that except as provided under Paragraph 8.2.(d) of the policy, the supply of cement and steel would not be eligible for deemed export benefits. This view was reiterated in the PIC meeting dated 9th September, 2011. This led to a show -cause notice to Simplex on 28th April, 2012, which ultimately culminated in the two impugned orders. Simplex also challenges the minutes of the two PIC meetings referred to above.