Drawback claim

[Himansu Sekhar]

Sir,

(1) an assessee procures indegenous goods and claims input stage credit

(2) and export the goods under payment of duties

(3) Claims rebate for the said duties

(4) Also Claims Drawback at the AIR rate.

(5) AIR rate for both Cenvat and non cenvat is same

Is there any irregularity. Kindly clarify

[KASTURI SETHI]

Sh.Himansu Ji,. Drawback can be claimed of import duties paid on inputs while importing and then after manufacture of finished goods, the Same are exported. Drawback is for imported inputs used in the manufacture of goods exported. Rebate can be claimed of CE duty paid on exported goods. If credit taken on inputs, drawback cannot be claimed. Both benefits I.e. Cenvat and drawback are not admissible.

[Himansu Sekhar]

As per the notification for draw back schedule where it is for cenvat taken, the draw back claim is for customs portion. The assessee has procvured only indigenous goods and there is no customs portion. Main confusion is about the circular issued by Board in 2010 where in it clarifiedbthat the 1st proviso to rule 3 of drawback schedule is for the department and for calculation of the all India rate. It has nothing to with the individual consignments. Even where the exempted goods are procured, the draw back can be claimed.

Kindly clartify about this

[Nash Industries I Pvt Ltd]

The same has been clarified by CBEC Circular No 1047/35/2016 dated 16th Sep 2016.

Regards

S.Ramaswamy

[YAGAY andSUN]

AIR Duty Drawback works on a concept which enumerates that Inputs must have incurred customs duties at any stage and goods should be exported but not the taxes.

[Himansu Sekhar]

Sir,

What emerges from reading of circular of 2010 reiterated in 2016 that the status of inputs is immeteriasl whether imported Or indigenous. When the rates are same for both categories I.e with cenvat or without cenvat , it is drawback for customs portion. Also customs portion does not mean that the goods must have suffered customs duty and imported at any stage. The exempted goods at input stage can be eligible for drawback. I perceived this from the clarifications issued by Board. Kindly clarify .

[YAGAY andSUN]

We are amenable with you on this matter.

[Himansu Sekhar]

Thank you very much

[Kishan Barai]

I have seen people are also calming DBK for switch goods, i.e goods sourced from China and send directly to USA with Indian Brand name tag & dbk is claimed. Even it you taken CENVAT Credit, DBK could be claimed but it would be of bit lower value as per chart shown in indiantradeportal.in

Thanks

AI Summary

Drawback eligibility: generally unavailable where CENVAT credit is taken, while excise rebate remains a separate claim. Duty drawback is intended to compensate customs duties on imported inputs used in exports and is generally not admissible where CENVAT credit has been taken on those inputs; rebate of excise on exported goods is a separate remedy. Board clarifications and AIR methodology have led to debate that input origin may be immaterial for AIR calculation and that drawback has been claimed in practice on exempted or directly imported goods, though admissibility and valuation can vary.