2013 (11) TMI 996 - AT - Customs

Tribunal Upheld Drawback Demand & Penalty, Set Aside Redemption Fine

The Tribunal upheld the demand for drawback and penalty but set aside the redemption fine due to the unavailability of the exported goods. - 2014 (314) ... Duty drawback - Confiscation of goods - Imposition of redemption fine - Held that:- Commissioner in para 27 of the order has categorically found that under General Note No.11 of Notification No.22/97-Cus (NT), dated 30.05.1997 in the case of Merchant Exporter, who procures the goods from the open market, the benefit of All Industry Rate of Duty Drawback shall be restricted to the Customs allocation only and export goods purchased from the open market shall be treated as having availed MODVAT/CENVAT facility and not entitled to Central Excise allocation of All Industry Rate of Drawback. In the present case, the exporter claimed the goods manufactured and supplied by M/s. SR Traders but on verification by the Department, there is categorical report of the Asst. Commissioner intimating that the supporting manufacturer is not available at the given address and it is also a fact that the appellant exporter is not able to provide any details or clue of M/s. SR Traders despite opportunities given to them by the Department. In the absence of any such evidence, the Commissioner s conclusion that goods have been procured from the open market by exporter cannot be faulted and accordingly, I uphold the same and hold that demand of Drawback amounting to ₹ 1,92,908/- has rightly been confirmed by the Commissioner and penalty also rightly imposed on the exporter - Redemption fine set aside - Decided partly in favour of assessee. Issues: Allegations of non-receipt of export proceeds and non-existence of supporting manufacturer.In this case, the appellant, a merchant exporter, filed an appeal against an order-in-original passed by the C.C.E., Gurgaon, regarding the sanction of drawback under the DFRC-cum-Drawback Scheme. The appellant exported readymade garments under the All Industry Rates of Drawback Schedule, 2004-05. The investigations revealed discrepancies regarding the existence of the appellant and the supporting manufacturer, leading to a Show Cause Notice demanding recovery of drawback, confiscation of goods, and penalties. The Commissioner upheld the demand for drawback, imposed penalties, and ordered redemption fine. The appellant challenged this order.The appellant's counsel argued that the allegations of non-receipt of export proceeds and non-existence of the supporting manufacturer were not sustainable. He contended that the foreign remittances details were available, and the supporting manufacturer might have relocated. The appellant had submitted self-declarations regarding the supporting manufacturer's non-registration under Central Excise and non-availment of CENVAT credit. The counsel also argued against the imposition of redemption fine since the exported goods were not available for consideration.The Departmental Representative highlighted that the drawback pertained to Central Excise allocation, and in the case of a merchant exporter, the benefit of drawback is limited to customs allocation. The Commissioner's order disallowed the drawback due to lack of proof of non-availment of CENVAT credit, leading to confiscation of goods.The Tribunal found that the appellant had claimed drawback for goods procured from the open market, restricting the benefit to customs allocation only. The supporting manufacturer's non-availability at the given address and the appellant's failure to provide evidence supported the Commissioner's decision. The demand for drawback was upheld, along with the penalty. However, the Tribunal agreed with the appellant that since the exported goods were not available, the redemption fine was set aside.In conclusion, the Tribunal upheld the demand for drawback and penalty but set aside the redemption fine due to the unavailability of the exported goods. The appeal was disposed of accordingly.