EOU not entitled to claim refund of TED on its own, may avail of the entitlements of DTA supplier specified in FTP

Last updated: 10 January 2022

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The Supreme Court has ruled that Export Oriented Units (EOUs) cannot claim a refund of Terminal Excise Duty (TED) on their own. However, EOUs may be eligible for entitlements available to Domestic Tariff Area (DTA) suppliers under the Foreign Trade Policy, provided they do not pass this benefit back to the DTA supplier. The court clarified that such refund claims should be processed under the FTP, not the Central Excise Act, and that if CENVAT credit has been utilised, the amount should be reversed rather than paid in cash.

Court :
Supreme Court of India

Brief :
The Supreme Court of India in the matter of Sandoz Private Limited v. Union of India [Civil Appeal No. 3358 of 2020 dated January 4, 2020] upheld the decision of the Bombay High Court that Export Oriented Unit ("EOU") is not entitled to claim refund of Terminal Excise Duty ("TED") on its own, however, adds a caveat that EOU may avail of the entitlements of Domestic Tariff Area ("DTA") supplier specified in Chapter 8 of Foreign Trade Policy ("FTP") on condition that it will not pass on that benefit back to DTA supplier later on.

Citation :
[Civil Appeal No. 3358 of 2020 dated January 4, 2020

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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