HC directed to adjudicate matter before Tribunal as it involved adjudication on technical points w.r.t. business transactions

Last updated: 20 July 2021

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Quick Summary

The Madras High Court has ruled that complex issues involving technical points related to business transactions and deemed exports cannot be decided in a writ proceeding. The court directed the Excise and Services Tax Tribunal (CESTAT) to adjudicate the matter, ensuring it considers relevant Supreme Court rulings and provides parties with an opportunity to present their case.

Court :
Madras High Court

Brief :
In M/s BAPL Industries Limited v. Union of India [W.P. 27387/2011 and MP No. 1/2011 & 1/2013 decided on July 14, 2021], M/s BAPL Industries Limited ("the Petitioner"), a manufacturer and exporter filed a writ before Hon’ble High Court Madras to direct the Central Government and the Director-General of Foreign Trade ("DGFT") to consider the deemed exports made by the Petitioner for the purpose of determining the Petitioner’s DTA entitlement.

Citation :
M/s BAPL Industries Limited v. Union of India [W.P. 27387/2011 and MP No. 1/2011 & 1/2013 decided on July 14, 2021

In M/s BAPL Industries Limited v. Union of India [W.P. 27387/2011 and MP No. 1/2011 & 1/2013 decided on July 14, 2021], M/s BAPL Industries Limited ("the Petitioner"), a manufacturer and exporter filed a writ before Hon’ble High Court Madras to direct the Central Government and the Director-General of Foreign Trade ("DGFT") to consider the deemed exports made by the Petitioner for the purpose of determining the Petitioner’s DTA entitlement.

The Hon’ble High Court Madras observed that the issue involves adjudication on technical points w.r.t. business transactions and examination of certain records as well as the policy decisions, which all are prevailing during the relevant point of time, more specifically, for the purpose of extending the benefits. Thus, the same cannot be adjudicated in a writ proceeding under Article 266 of the Constitution of India.

Directed that such issues to be decided by Commissioner of Central Excise and Customs, Excise and Services Tax Tribunal ("CESTAT").

Further, stated that Commissioner of Central Excise and CESTAT are bound to look into the principles laid down by the Hon’ble Supreme Court of India in Virlon Textile Mills Limited Vs. Commissioner of Central Excise, Mumbai [2007 (211) E.L.T. 353 (S.C.)] and its applicability with reference to the facts and circumstances placed by the Petitioner regarding their business transactions. Furthermore, stated that all the facts and circumstances with reference to the records are to be adjudicated and the application of the principles also must be decided by affording the opportunity to the parties.

FAQ :

The case concerned whether deemed exports made by M/s BAPL Industries Limited should be considered for determining their Duty Drawback (DTA) entitlement.

The High Court found that the issue involved adjudication on technical points concerning business transactions and examination of specific records and policy decisions, which are better suited for a tribunal.

The Commissioner of Central Excise and Customs, Excise and Services Tax Tribunal (CESTAT) was directed to adjudicate the matter.

CESTAT is bound to consider the principles laid down by the Supreme Court of India in Virlon Textile Mills Limited Vs. Commissioner of Central Excise, Mumbai.

The tribunal must afford an opportunity to the parties to present their case and must adjudicate all facts and circumstances with reference to the records.