Entitlement to Duty Drawback: Supreme Court Decision on Koyna Hydro Electric Project
Case Title: Union Of India And Ors. vs. M/S. B. T. Patil And Sons Belgaum (Construction) Pvt. Ltd.
Case No.: CIVIL APPEAL NO.7238 OF 2009
Decided On: 05.02.2024
Coram: Hon’ble Mr. Justice Abhay S. Oka, And Hon’ble Mr. Justice Ujjal Bhuyan
Facts of the Case:
M/S. B. T. Patil and Sons Belgaum (Construction) Pvt. Ltd. and the Union of India are parties to a civil appeal before the Supreme Court of India over duty drawback and interest on late payments. The Koyna Hydro Electric Power Project subcontracted civil works to the respondent, a class-I contractor. The primary dispute pertained to the respondent’s eligibility for duty drawback in accordance with the Exim Policy, 1992-1997, for providing products that were considered exports. The respondent’s right to duty drawback and interest on late payments was upheld by the Policy Interpretation Committee’s opinion.
Legal Provisions
The case’s legal aspects centre on the Exim Policy, 1992–1997 claim to duty drawback and interest on late payments. To determine the respondent’s right, the Supreme Court examined the Central Excise Act, the Customs Act, and other notifications. The Court stressed that the defendant was entitled to duty drawback since their supply of commodities for the project qualified as “deemed export” under the Exim Policy. The Court further emphasized the Customs Act’s provision for interest on delayed refunds, which establishes a fifteen percent rate.
Issues
The issues focus on M/S. B. T. Patil and Sons Belgaum’s claim to duty drawback and interest for payments that are delayed. The primary dispute is to the respondent’s eligibility for duty drawback under the Exim Policy, 1992-1997, for providing products considered exports for the Koyna Hydro Electric Power Project. The respondent is a class-I contractor that was given a sub-contract for civil works. The dispute revolves around how statutes and policy frameworks pertaining to tax drawback and interest on postponed refunds should be interpreted.
Court’s analysis and decision
The respondent’s right to duty drawback and interest on delayed payment was affirmed by the Supreme Court after it examined the statutory framework and confirmed that the commodities they supplied for the project qualified as “deemed export” under the Exim Policy. After dismissing the appellants’ appeal, the Court emphasised the necessity of adhering to legislative rules and policy frameworks in determining claims to duty drawback and interest on delayed payments.
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Written by – Aastha Ganesh Tiwari