TaxTMI 
TaxTMI 
2016 (5) TMI 440
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....ion No. 33/2002 (NT) as amended by Notification No. 80/2002 (NT) dated 10th December, 2002 and the Flanges exported by them after 6th April, 2003 till 30th June, 2003 are covered under SS 73.28 of the Table of Drawback Rates 2003-04 (hereafter "Drawback Schedule 2003-04") as notified by Notification No. 26/2003 (NT). The Respondents contest the claim as according to them, Flanges are manufactured by using low grade steel and are, therefore, not covered under SS No. 73.29 or SS No. 73.28 for the purposes of grant of duty drawback. The Respondents state that the duty drawback rates have been computed on the basis of the data provided by the Forgings Panel of the Engineering Export Promotion Council (EEPC), which did not contain any data regarding Flanges and, therefore, duty drawback at the rates fixed by the Central Government is not available for export of forged Flanges. 2. In respect of certain shipments, claims made by the Petitioners for duty drawbacks were pending while in certain other cases, claims were sanctioned. Subsequently, show cause notices have been issued calling upon the Petitioners to show cause why their claims should not be rejected and why the drawback claim....
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....RBRL had exported Flanges under Shipping Bill Nos.1258707 and 1270730 in respect of which a duty drawback amount of Rs. 7,88,956/- was sanctioned. MFRBRL has also exported Flanges under Shipping Bills dated 10th April, 2003 to 16th May, 2003 in respect of which MFRBRL has claimed a sum of Rs. 39,17,873/- as duty drawback as per Drawback Schedule 2003-04. 4.3 MFRBRL received a Show Cause Notice dated 4th June, 2003, inter alia, calling upon MFRBRL to show cause as to why the duty drawback amount of Rs. 51,54,890/- (as claimed by it as per Drawback Schedule 2002-03) not be denied. Further, MFRBRL was also called upon to show cause as to why an amount of Rs. 7,93,820/- (subsequently corrected to Rs. 7,88,956/-), which was sanctioned earlier be not recovered along with interest. 4.4 MFRBRL was issued another Show Cause Notice dated 22nd July, 2003 referring to the Corrigendum dated 13th May, 2003 issued by the Respondents for rectifying, inter alia, SS 73.28, 73.29, 73.30 and 73.31 of Drawback Schedule 2003-04 and calling upon MFRBRL to show cause why the benefit of duty drawback in respect of Shipping Bills for the period 10th April, 2003 to 16th May, 2003 be not denied to it. ....
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.... relevant entries (73.28 and/or 73.29) of the Drawback Schedules. 7. Both, Mr Kamal Nijhawan and Mr Satish Kumar, learned Senior Standing counsels strongly relied upon the decision of the Gujarat High Court in Micro Forge (India) Ltd. v. Union of India: 2014 (307) E.L.T. 652 (Guj.) and contended that the issues agitated by the Petitioners were covered by the said decision. 8. The learned counsel for the Respondents also supported the clarification issued by the Joint Secretary (Drawback), Ministry of Finance, by his letter dated 8th April, 2003 wherein it was clarified that the data relating to Flanges was not provided by the Forgings panel of EEPC and, therefore, it was not possible for Central Government to determine the rate of duty drawback as applicable to Flanges; consequently SS Nos. 73.29 and 73.30 of Drawback Schedule 2002-03 and SS Nos. 73.28, 73.29 and 73.30 of Drawback Schedule 2003-04 were not representative of the product Flanges. And, therefore, no duty drawback was available on export of Flanges. 9. The principal question that arises for consideration in these petitions is whether the export of Flanges manufactured by the process of Forging are eligible for....
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.... class or description used in the manufacture or processing of such goods or carrying out any operation on such goods, the Central Government may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the rules made under sub-section (2). Provided that no drawback shall be allowed under this sub-section in respect of any of the aforesaid goods which the Central Government may, by rules made under sub-section (2), specify, if the export value of such goods or class of goods is less than the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods, or is not more than such percentage of the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods as the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided further that where any drawback has been allowed on any goods under this sub-section and the sale proceeds in respect of such goods are not received by or on be....
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.... enable such authorised officer to inspect the processes of manufacture, process or any other operation carried out and to verify by actual check or otherwise the statements made in support of the claim for drawback. (d) for the manner and the time within which the claim for payment of drawback may be filed;" 13. In exercise of the powers conferred under Section 75(2) of the Act and Section 37 of the Central Excise Act, 1944, the Central Government had framed the Customs and Central Excise Duties Drawback Rules, 1971 which were subsequently replaced by the Customs and Central Excise Duties Drawback Rules, 1995 (hereafter "the Rules"). 14. Rule 3 of the Rules, inter alia, provides that the drawback may be allowed on the export of goods on such amount or at such rate as may be determined by the Central Government. Sub- Rule (2) of Rule 3 of the Rules indicates the relevant data required to be considered by the Central Government in determining the amount or the rates of the duty drawback. Rule 3(2) of the Rules reads as under: "(2) In determining the amount or rate of drawback under this rule, the Central Government shall have regard to:- (a) the aver....
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....oy/Carbon Steel Forgings (rough) / unmachined/semifinished / machined / identifiable ready to use machined parts / components manufactured through forging process, when CENVAT facility has not been availed. Rs.19.00 (Rupees nineteen only) per kg. of steel content 12.00 7.00 17. The Central Government issued a notification on 1st April, 2003 being Notification No. 26/2003-CUSTOMS (N.T.), specifying All Industry Rates of duty drawback in supersession of the drawback rates specified earlier under Notification No. 33/2002 - CUSTOMS (N.T.). The entries SS Nos. 73.28, 73.29, 73.30 and 73.31 of the Drawback Schedule 2003-04 as notified under the notification dated 1st April, 2003 reads as under: Serial/ Sub- Serial No. Description of Goods Rate of Drawback Allocation Customs Excise 73.28 Non-alloy/ Carbon Steel Forgings (rough)/ unmachined/ semifinished/ machined/ identifiable ready-to-use machined parts/ components, manufactured through forging process, when CENVAT facility has not been availed. Rs.17.00 (Rs. seventeen only) per kg. of steel content. 10.70 6.3 0 73.29 Non-alloy/ Carbon Steel Forgings (rough)....
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....urther claim that they have not availed CENVAT in relation to the inputs used for manufacturing the Flanges and, accordingly, have claimed duty drawback at the rates specified in respect of SS 73.29 of Drawback Schedule 2002-03 for exports under shipping bills for the period prior to 7th April, 2003, the date from which the notification dated 1st April, 2003 came into effect. R.N. Gupta & Co. Ltd. (the Petitioner in W.P.(C) 5394/2003) and MFRBRL have also claimed benefit of duty drawback under entry SS 73.28 of the Drawback Schedule 2003-04 for export of Flanges made after 6th April, 2003. 21. It is clear on a plain reading of SS 73.29 of the Drawback Schedule 2002-03 and SS 73.28 of the Drawback Schedule 2003-04 that Flanges manufactured and exported by the Petitioners are covered under those entries. 22. Insofar as exports made under shipping bills prior to the notification dated 1st April, 2003 are concerned, the Respondents are seeking to deny the benefits solely on the basis that the data related to the said products was not considered while fixing the All Industry Rates of duty drawback. Although, it was also mentioned that the Petitioners have not provided proof of pay....
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.... of the said Circular is reproduced below:- "Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Declaration under Rule 12(1)a(ii) of Drawback Rule for availing AIR of Drawback. Certain Export Promotion Councils have brought to the notice of the Board that certain Custom Houses are relying on the first proviso to Rule 3 of Customs & Central Excise Rules, 1995 and Declaration filed by exporters under Rule 12(1)(a)(ii) of the said Rules to seek evidence of payment of duties and evidence of import of inputs against individual consignments exported by individual exporters under claim for Drawback at All Industry Rate and this is creating undue delay in disbursement of drawback and harassment to genuine exporters. 2. The issue has been examined in the Board. All Industry Rate is based on the concept of averages, wherein the drawback rate itself, as well as its customs and excise portions, are based on weighted averages of consumption of imported / indigenous inputs of a cross section of exporters and the average incidence for duties suffered on such inputs. These rates have no relation....
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....hat Shri A. K. Raha, Commissioner of Customs, ICD-TKD, Delhi in his letter No VIII/ICD/TKD/20/DBK/22/03 dated 20th March 2003 had provided details of certain shipment bill relating to drawback claims under these sub-serial numbers, which appear to be disproportionately high. According to you, all these shipments were for 'FLANGES'. We have gleaned through our data and find that data provided by Forgings Panel of Engineering Export Promotion Council did not contain data regarding "FLANGES" exporters of which seem to have been availing the benefit of these entries and getting compensation more than that was intended by the Government. It is, therefore, brought to your notice that no data has been furnished by exporters of 'FLANGES'. It has also been learnt that 'FLANGES' require low-grade steel as input, value of which is also very low. Hence, the aforesaid entries in the Drawback Schedule are not representative of the product 'FLANGES'. Therefore, keeping in view the revenue interest and in consonance with the true mandate of Customs & Central Excise Duties Drawback Rules 1995, it is clarified that 'FLANGES' were not and are not eligi....
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....within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law, the case might otherwise appear to be." 32. In Hemraj Gordhandas v. H.H. Dave, Assistant Collector of C. Ex. & Customs: 1978 (2) E.L.T. J 350 (S.C.) a Constitution Bench of the Supreme Court considered the question whether excise duty exemption was available in respect of cotton fabrics which were produced on powerlooms owned by a co-operative society. Such exemption was claimed in respect of two notifications issued by the Central Government. The appellant therein claimed that in terms of the plain language of the notifications, it was entitled to exemption from payment of excise duty on the cotton fabrics. The appellant contended that the exemption applied to all cotton fabrics which were produced on powerlooms owned by cooperative societies and it was not relevant as to who produced or manufactured such fabrics. The Supreme Court accepted the above contention, as the notification cle....
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....usion can be read in which is not expressly indicated or ascertainable from the plain language of the entries in question. 35. We are, respectively, unable to subscribe to the view accepted by the Gujarat High Court in Micro Forge (India) Ltd. (supra). In our view, it is not open for a Court, while interpreting any statute, to examine the material which weighed with the authority while framing that law if the provisions of the statute are clear and unequivocal. The scope of the entries in question have to be interpreted on the plain language of the entries, if the same is unambiguous, and it is not open for a Court to interpret the entries in the light of data which may or may not be collected by the Central Government in framing those entries and fixing the All Industry Rates. In the present case, we find that the language of the entries is clear and unequivocal and, thus, there is no room to attempt to discover the intention of the Central Government by taking recourse to any other external aid. 36. In view of the aforesaid, the clarification dated 8th April, 2003 has no statutory force. The express language of the Drawback Schedules as notified by Central Government in exe....