DGFT cannot Legislate - High Court
A meeting of the Policy Interpretation Committee was held under the Chairmanship of the DGFT on 15.03.2011. Zonal Jt.DGFTs and the RAs brought to the notice of the Committee their inability to settle the Deemed Export claims due to inadequate Budget Provision. They informed that in all offices there has been large number of pending cases. DG informed the Committee that Rs. 2,000 crores has been allotted in the Supplementary Appropriation which would be received shortly. This amount needs to be utilized in the current financial year itself that is before 31st March 2011. Dr. L.B. Singhal, Jt.DGFT, referred to the Public Notice No.35 issued on 1st March 2011 which amended para 8.3.1 of Handbook of Procedure, Vol. I and Appendix of ANF-8 and explained the background. Provisions of PN 35 and Notification 28 have to be mandatorily followed for any payment of duty drawback claims/refund of Terminal Excise Duty henceforth.
Regarding refund of Terminal Excise Duty (TED) for supplies to non-mega power projects, it was clarified that Para 8.4.4(iv) of Foreign Trade Policy, 2009-14 clearly stipulates that the benefit of refund of TED under para 8.3(c) of the Policy is not available for such supplies. In such cases excise duty paid at the terminal stage of supply (last instance of excise duty paid in the chain of manufacture process in the supply) is not to be refunded in any manner including as drawback [para 8.3(b) of Policy].
Recovery notices flew in all directions.
Recently the Gujarat High Court held that the DGFT had no power to legislate and the power to frame Duty Draw Back Rules can be legislated by the Central Government only and the same cannot be delegated to the DGFT.
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