INDOWORTH INDIA LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner, a Company incorporated under the Companies Act , 1956 claims to be an Export Oriented Unit having permission to import as well as export products under the Foreign Trade Policy. During the period from October-2005 to December-2007, it had cleared goods under the Domestic Tariff Area - DTA Sale and had paid excise duty to the Government. While seeking such permission, the petitioner claims that it did not include the value of 'deemed exports' in the total value of exports though the figures in that regard were mentioned. As a result there was shortage in the entitlement of the petitioner while clearing its finished goods in terms of paragraph 6.8 of the Foreign Trade Policy. On 18/9/2006, a show cause notice was issued to the petitioner alleging that the clearance made with regard to DTA Sale was beyond the limit prescribed under the exemption and that the petitioner would be liable to pay excise duty in that regard. Reply to the said show cause notice was submitted on 1/11/2007 stating therein that since the sale was covered under 'deemed exports' there was no question of paying any extra excise duty. The said clarification was not accepted and hence the petitioner preferred an appeal against the order dtd. 31/12/2007. During pendency of the appeal, the Development Commissioner extended DTA Sale entitlement of 'deemed exports' for the period from October-2005 to December-2005. However, since this permission was withdrawn without hearing the petitioner the order dtd. 5/12/2008 was challenged in Writ Petition No. 2343 of 2009 [M/s Indoworth India Limited Versus Union of India & Another]. The petitioner was directed to be heard in the matter. Thereafter on 9/12/2011 the Development Commissioner passed an order refusing to grant any benefit of 'deemed exports' and held the petitioner liable to pay the differential duty of DTA Sale effected in respect of 'deemed exports'. Being aggrieved, the aforesaid order dtd. 9/12/2011 is challenged in the present writ petition. The petitioner seeks a declaration of its entitlement to the benefit of 'deemed exports' while calculating free onboard value of exports in terms of paragraph 6.8(a) of the Foreign Trade Policy for the relevant period.

(2.) By the order dtd. 10/10/2013, the consideration of this writ petition was deferred since a similar issue as raised was being considered by the Hon'ble Supreme Court in Special Leave Petition No. 646 of 2012 [Union of India & Others Versus Arvind Cotspin]. The aforesaid Special Leave Petition having been decided on 15/11/2022, the writ petition has been taken up for consideration.

(3.) RULE. Rule made returnable forthwith and heard the learned counsel for the parties.