TaxTMI 
TaxTMI 
2010 (7) TMI 714
X X X X Extracts X X X X
X X X X Extracts X X X X
....xport of Skimmed/Full Cream Milk Powders and Butter Oil etc. The applicant had filed drawback claim of (i) Rs. 1,10,79,147/- and (ii) Rs. 8,68,975/- an account of Exports goods under Notification No. 68/2007-Cus. (N.T.), dated 1-7-2007 and No. 103/2008-Cus. (N.T.), dated 29-8-2008. These were sanctioned and paid to the applicant. Later on these were proposed to be recovered with interest vide a respective Show-Cause-Notices dated 31-1-2009 under Rule 16 of the Drawback Rules. The sanctioned. Drawback of duty were confirmed to be recoverable on the following grounds :- 2.1 The Applicant did not clear goods in Form ARE-2 and did not follow the procedure under Notification No. 42/2001. By not doing so, in addition to procurement of input material without payment of duty, the Applicant have availed the double benefit of duty drawback on export consignment. Therefore, the Applicant have knowingly/deliberately suppressed the fact by not clearing their exported goods under ARE-2 as required under Notification No. 43/2001. 2.2 The contention of the Applicant that, neither the assessment of Shipping Bill has been challenged nor the revenue has filed any appeal against the or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9(2) and the same officer has sanctioned the drawback. 3.3 The Ld. Commissioner (Appeals) has not dealt with the submission given by the applicant in regard to the legal position that the drawback claimed by the applicant is only of customs @ 1% and the same does not include the excise portion hence whether there is duty free procurement of inputs or availment of cenvat on duty paid inputs the custom drawback of 1% is unaffected. 3.4 As regard the submission of the Applicant that no show cause notice can be issued for recovery of drawback without challenging the assessment of export shipping bill involving sanction of drawback. The Ld. Commissioner (Appeals) relied upon the judgment of the Apex Court in UOI v. Jain Shudh Vanaspati Ltd. - 1980 (08) LCX 003 and Re-Rolling Mills v. CCE, Bhubaneshwar, 1989 (43) E.L.T. 115 (Tribunal). In the case of Jain Shudh Vanaspati of Hon'ble Supreme Court it was held that there is a clear cut fraud in the part of importer therefore there is no need of review under Section 130 and show cause notice for recovery is correct. 3.5 The whole dispute in granting the 1% drawback is based on condition No. 7(f) of Notification No. 68....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e result remains same in both the situations i.e. elimination of duty burden on inputs used in the export goods. Any finding in terms of clause (ii) of record proviso to Rule 3(i) of Customs, Central Excise Duties and Service Tax Drawbacks Rules, 1995 by interpreting them in isolation is improper. 3.10 It is further clarified that the first proviso to Rule 3 of Drawback Rules is meant for the Ministry and that it essentially provides a guideline as to how the duty drawback rates are to be determined in certain situations and is not intended for the fiel formations to use this rule for arbitrarily altering All Industry Rates of duty drawback in the case of individual exporters for individual consignments. Circular No. 19/2005-Cus. also clarified that All Industry Rates of duty drawback is to be allowed on export goods manufactured out of inputs, some of which are non-duty paid. (i) It is an admitted fact that 1% Drawback is representing only of Customs portion. However, the duty foregone on the packing material under notification No. 43/2001-C.E. (N.T.) is excise duty. This excise duty was not taken into account for determining 1% duty drawback rate. It is immaterial w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; Sree Digvijay Cement Co. Ltd. v. Collector of C. Ex. - 1991 (52) E.L.T. 631 (Tribunal) (vii) Kelvinator of India v. CCE, Faridabad - 2005 (179) E.L.T. 355 (Tri.-Del.) (viii) La Opala RG Ltd. v. CCE, JSR - 2002 (149) E.L.T. 164 (Tri. - Kolkata) (ix) Priya Blue Industries Ltd. v. CCE (Preventive) - 2004 (172) E.L.T. 145 (S.C.) (x) Collector of C. Ex., Kanpur v. Flock (India) Pvt. Ltd. - 2000 (120) E.L.T. 285 (S.C.) (xi) Vittesse Export Import v. CCE (EP), Mumbai - 2008 (224) E.L.T. 241 (Tri-Mumbai) (xii) CC (Imports), Mumbai v. Lord Shiva Overseas - 2005 (181) E.L.T. 213 (Tri.-Mumbai) In view of above judgments it is clear that the refund once sanctioned cannot be recovered by issuing show cause notice, without challenging the assessment of export shipping bill Ld. Assistant Commissioner on perusal of Rule 13 of the Customs, Central excise Duties and Service Tax Drawback Rules, 1995 has held that, no separate Order-Appellable Order is required, which is not correct. 3.14 Finding of Ld....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n'ble Supreme Court in case of Rubfila International Ltd. v. Commissioner [2008 (224) E.L.T. A133 (S.C.)] upholding the Tribunals order as under :- ''The Appellate Tribunal in its impugned order had held that even though All Industry Rate was fixed for a particular export product, applicable to all exporters who export the products, when there is evidence that inputs had not suffered any duty mischief of Rule 3(1)(ii) of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 was attracted and no drawback can be claimed." 4.3 Further the Government of India in the RA of M/s. Tata International Ltd. reported in 2009 (246) E.L.T. 767 (GOI) has also decided that if the condition of the notification is not fulfilled the DBK is not admissible. In the said case the DBK was denied on the ground of simultaneous availment of DEPB on inputs and DBK on export. In para 12 of the order of the Government of India. It is held that :- ''the plea of the respondents that actual duty suffered and actual consumption patterns are not to be looked into is circumventing the fact for back door entry from one (DEPB) Scheme into another DBK Scheme which is (Straightway) not availab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the inputs used in the manufacturing the export goods were procured either duty free under Rule 19(2) of the Central Excise Rules, 2002 or when rebate of duty paid on them had been taken under Rule 18 of the Central Excise Rules 2002." In the instant case also party has availed benefit of duty free inputs under Rule 19(2) of the Central Excise Rules, 2002 as well as drawback of All Industry rate on exported goods which is manufactured or produced by using duty free inputs under Rule 19(2) of the Central Excise Rules, 2002. Hence Drawback is not admissible as per above said clarification also. 5. The personal hearing in this case has scheduled and held on 13-5-2010 which was attended by Sh. Ramesh Nair Advocate for and on behalf of the Applicant and by Sh. K.L. Baria, Superintendent ICD, Malanpur from the office of the Respondent-Commissioner. Both of them have made their respective submissions which consisted of re-itrations of Grounds/facts as already on record. 6. Government has carefully gone through the records of the case including orders as passed by lower authorities along with relevant provisions of Acts/Rules and Notification/Circular as applicable to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Credit Rules, 2004 without effecting - Drawback involved. 8.3 The condition of non-availment of input benefit under Rule 19(2) read with Notification No. 43/2001-C.E. (N.T.) stand complied with as the applicant has paid back whole of Excise Duty of Rs. 22,06,762/- along with interest of Rs. 2,57,385/- on the Entire inputs so procured. 9. In reference to above Government is of considered opinion that Customs and Central Excise Duties Drawback Rules, 1995 are in itself a complete statute and has inbuilt mechanism to dealt with the correction/consequences of any contravention of provisions contained therein. These are not dependent or bound by other sections of the Customs Act, 1962 because importing and imposing gap conditions of requirement of any other sections of either of the main Central Excise Act, 1944 and/or Customs Act, 1962 would make such inbuilt provisions of Drawback Rules as redundant. 10. On the point 8.1 above Government is in conformity with the view's of the appellate Commissioner that when Judgments of the Apex Court in M/s. Jain Shudh Vanaspati Ltd. case [1980 (08) LCX 0003)] and M/s. Re-Rolling Mills case [1989 (43) E.L.T. 115 (T)] are a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t which is manufactured or exported either by availing the rebate of duty paid on materials used in the manufacture or processing of such commodity or product in terms of Rule 18 of the Central Excise Rules, 2002 or manufactured or exported in terms of sub-rule (2) of Rule 19(2) of the Central Excise Rules 2002. Therefore, All Industry Rates of Duty Drawback, even the customs component, cannot be availed of when the inputs used in manufacturing the exported goods were procured either duty free under Rule 19(2) of the Central Excise Rules, 2002 or when rebate of duty paid on them had been taken under Rule 18 of the Central Excise Rules, 2002.'' In view of above clarification of Central Board of Excise &. Customs, no drawback is admissible in this case. 13. On the point 8.3 above, Government is not inclined to accept the self Interpretation of benefit of duty amounts to non-availment of input benefit under Rule 19(2) read with Notification Nos. 43/2001-C.E. (N.T.) because Neither there is any such provision under any of the Rules/Regulations nor it alters the factual position as was these at the time of export and at the time of claim of impugned drawback which was very mu....