Brand rate drawback cannot follow an AIR claim without valid amendment or statutory relaxation under drawback rules

Brand rate drawback was held unavailable where the exporter had filed claims under the All Industry Rate schedule entry marked 'A' while availing Cenvat credit, because that declaration was inconsistent with the conditions of the AIR mechanism. An inadvertent error in the shipping bills was not accepted in the absence of any authorised amendment or statutory relaxation, and the drawback scheme was applied on the basis of strict compliance with its prescribed procedure. The objection based on natural justice also failed because the applicants had been heard and the material was considered. The rejection of the brand rate drawback claims was therefore upheld on the record before the authority.

---

---

Issues: Whether the applicants were entitled to brand rate drawback under Rule 7(1) of the Duty Drawback Rules, 1995 despite having exported goods under the All Industry Rate schedule entry marked 'A' and availing Cenvat credit, and whether the impugned rejection suffered from any legal infirmity.

Analysis: The revision authorities found that the drawback claims had been filed under the All Industry Rate schedule entry 'A', which is available only where Cenvat credit has not been availed. On verification, the applicants were found to be availing Cenvat credit, making the claims under that declaration inadmissible. The plea that the filing under category 'A' was an inadvertent error was not accepted because no authorised amendment of the shipping bills or any relaxation under the relevant drawback rules was shown. The scheme of drawback was treated as requiring strict adherence to the prescribed statutory procedure, and the attempt to convert an AIR declaration into a brand rate claim after export was held to be impermissible on the record before the authority. The plea based on natural justice was also rejected since the applicants had been heard and the material was considered.

Conclusion: The revision applications failed and the rejection of the brand rate drawback claims was upheld.

Ratio Decidendi: Where an exporter has declared and claimed drawback under the All Industry Rate mechanism, a subsequent claim for brand rate drawback cannot be entertained in the absence of a valid amendment or statutory relaxation, and the drawback scheme must be applied according to its prescribed procedure.

---