TaxTMI 
TaxTMI 
2018 (4) TMI 920
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....executed the LUT but could not get the premises customs bonded within the validity period of the said LOP despite getting LOP extended upto 31.03.2010. During the year 2012, the Customs at ICD, TKD sought a clarification from the jurisdictional Central Excise officer as to whether appellants were a functional EOU or not, in which case they would not be eligible for drawback. The Central Excise authorities clarified that the appellant had never functioned as an EOU as they could not get the premises customs bonded within the validity period of LOP. Based on this clarification, Customs ICD, TKD released all the pending drawback claims of the appellants. Subsequently, in the year 2014, the DRI initiated fresh investigations into the matter and came to the conclusion that as the appellants were EOU since they had sought benefits from the Income Tax authorities under Section 10B of the Income Tax Act, 1961 which is available only to a 100%EOU. On the basis of this allegation, the show cause notice was issued to the appellants proposing recovery of draw back sanctioned and paid to them during the period 2006-07 to 2009-10. The appellants contested the show cause notice on the premise tha....
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.... Commissioner of Customs], either before or after the appointed day, under section 130, as it stood immediately before that day: [Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to,- (a) any goods imported or exported as baggage; (b) any goods loaded in a conveyance for importation into India, but which are not unloaded at their place of destination in India, or so much of the quantity of such goods as has not been unloaded at any such destination if goods unloaded at such destination are short of the quantity required to be unloaded at that destination; (c) payment of drawback as provided in Chapter X, and the rules made there under:" As per the said provisions, against the order of Commissioner (Appeals) with regard to payment of drawback, as per proviso and Chapter X and Rules made there under, the appeal will not lie before this Tribunal. We find that admittedly, against the order of Commissioner (Appeals), dealing with the issue of drawback, appeal is not maintainable before this Trib....
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....raised before the appellate court would not be relevant on the question of jurisdiction of the Supreme Court or the High Court under Section 35L or 35G of the aforesaid Act. This was apparent from the language and words of the two provisions and a contrary interpretation would lead to unacceptable results with one party filing appeal under Section 35G and the other party under Section 35L of the said Act. Further, the respondent may be denied right to file cross objections. It is noticeable that in the first round also, against the order of the Tribunal, an appeal was preferred before the Supreme Court by the assessee. 2. In these circumstances, the appeals are returned as they are not maintainable before the High Court. It is open to the appellant-Revenue to file an appeal under Section 35L of the Central Excise Act, 1944, if so advised, and in accordance with the law." We, however, must express a reservation regarding the observation that the issues and contentions decided in the order-in-original would determine whether an appeal would lie in the High Court under Section 35G or in the Supreme Court under Section 35L. In our view, it is not the order-in-original i.e. ....
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....d Units. Under the EOU scheme, the units are allowed to procure locally without payment of duty all types of materials, components, packing material, consumables, spares and various other specified categories of equipments including material handling equipments, required for export production or in connection therewith. The exporters are treated as a special class. I find that it is on record that the appellant had set up a unit as 100% EOU and letter of permission to this effect was issued by NSEZ authorities. I find that the fact, which is undisputed, is that at the time of exportation, tie appellant unit did not disclose their identity of being an EOU to Customs and claimed duty drawback on the exported goods. I find that having been accepted the terms and conditions of LOP through executing Legal Undertaking (LUT), it was incumbent upon the appellant unit to declare the true status of unit while exporting the goods from India. Fron3 perusal of ANNEXURE A regarding Details relating to the claim by the exporter for deduction under Section 10 of the Income Tax Act, 1961 for the Assessment year 2007-08, I find that date of commencement of manufacture of production is shown as 01.06....
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....red the status declared to Income Tax with Customs and Central Excise authorities. I am in. agreement with the findings of the adjudicating authority that Appellant No.2 was the key person for following modus operandi of availing simultaneous benefits under different export promotion schemes. I find that the penalty imposed in the impugned order is just and proper and no interference is warranted. The ratio of the cases referred to b the appellant is confined o the facts and circumstances of the particular case and I find that all the sad judgments were case specific and need to be applied provided the conditions/circumstances remains same. Further, there was nothing on record to suggest that the circumstances/conditions which prevailed in these judgments were existing in the present case. The appeal filed by the appellants does not merit consideration." We find that in the impugned order, the ld. Commissioner (Appeals) has examined the issue whether the appellant unit is an 100% EOU or not and held that appellant is 100% EOU and therefore, dismissed their appeals. Therefore, in the spirit of the judgment of the Hon'ble High Court of Punjab & Haryana in the case of M/s. Raja....
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....ve acted as 100% EOU unit and they are eligible for drawback benefit all along exports made after 31.03.2010. In view of above circumstances, it appears that the said unit has never operated as an EOU." 9. We further taken note of the fact that, as per letter dated 05.10.2006, issued by the Development Commissioner, in which it has been clearly stated that the appellant unit will be treated as working under 100% EOU scheme from the date from which it starts working in customs bonded and as per the clarification given by the office of the Commissioner of Customs, ICD, Tughlakabad dated 24.07.2012 that the appellant has never functioned as an EOU and released the pending drawback claims. We find that without customs bonding, the unit cannot be considered as an EOU. Further, as per the Customs Manual of supplementary instructions, Para 3.4, which is reproduced below, the EOU must be custom bonded:- "3.4 On approval for setting up an EOU by Unit Approval Committee, a letter of Permission (LOP/LOI) is issued by the jurisdictional Development Commissioner. It mentions inter alia the capacity and items of manufacture and export, capital goods permitted to be imported/ procu....
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....0% EOU and it is only a DTA Unit. 11. In view of the above terms, the impugned order is set-aside and the appeals are allowed with consequential relief to the appellants. (Order pronounced in the court on 12.12.2017) B. Ravichandran Member (Technical) Ashok Jindal Member (Judicial) Difference of Opinion I have perused the Final Order proposed by the Id Member (Judicial), With due regard, I am not able to accept the Final Order recorded by the Id Member (Judicial) with reference to admissibility of the present appeal before the Tribunal. The reasons for my disagreement are recorded as below: a) The present proceedings emanated by issue of SCN dated 04.09.2014 by the Joint Commissioner of Customs (ICD), Tughlakabad. The SCN proposed a denial of drawback amounting to Rs. 6.91 crores and sought to recover the same under the provisions of Rule 16 of Customs and Central Excise Duties Drawback Rules, 1995. b) The notice was decided by the original authority vide order dated 19.10.2015. The original authority held that the drawback amounting to Rs. 6.91 crores is to be denied and the amount already sanctioned was ordered to be recovered under Rule 16....
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....of both drawback as well as classification, the appeal cannot be maintained before the Tribunal. It is to be further noted that in M/s ESSAR Overseas Company, 2017 (348) ELT 171 (Tri-Mumbai), the Tribunal held that payment of drawback also Includes the recovery of drawback. Any proceedings for recovery of drawback cannot be appealed before the Tribunal when the order is passed by Commissioner (Appeals). 4. In view of the above analysis, I find that the present appeal cannot be entertained by the Tribunal in view of the statutory bar mentioned above. When the appeal is not maintainable due to lack of jurisdiction, the question of examining the merits of the appeal does not arise. Point of difference for reference In view of findings recorded by Member (Tech) and Member (Judicial), as above, the following difference of opinion needs to be resolved: "Whether the appeal is maintainable before the Tribunal is view of the bar of Section 129A of the Customs Act as held by the Member (Tech) or the appeal can be entertained by the Tribunal and on merit can be decided as held by the Member (Judicial)." The appeal file may be place before Hon'ble President for further action. ....
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....ppeal can be entertained by the Tribunal and on merit can be decided as held by the Member (Judicial)." 5. With the above background, I heard Shri A.K. Prasad, learned Advocate for the assessee, as well as Shri Amresh Jain and Shri R.K. Manjhi, learned DRs for the Revenue. 6. The arguments raised by Shri A.K. Prasad are summarized below: (i) On the question of jurisdiction, the learned Member (Judicial) and learned Member (Technical) have taken opposing views. This itself indicates that the issue is debatable, and hence, the benefit of doubt should be extended to the assessee. (ii) He submitted that Section 129A of the Customs Act, 1962, deals with appeals to the Appellate Tribunal. The proviso to Section 129A bars the jurisdiction of the Tribunal in respect of, among other things, "(c) Payment of drawback as provided in Chapter X and the Rules made thereunder". Section 35B of the Central Excise Act, 1944, deals with similar provisions on the Central Excise side, in which the jurisdiction of the Tribunal is barred in respect of orders which relate to "(b) A rebate of duty of excise on goods exported to any country or territory outside India or on excisable materia....
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....d DR, relied on the Tribunal's decision in the case of DCS International Trading (Supra) and submitted that in the present case, the fundamental dispute is one of payment of drawback and the status of the appellant is an issue to be considered in deciding the drawback. 8. Heard both sides and perused the records. 9. The appellant exported goods through ICD TKD, under claim for drawback. The same was originally paid, but was ordered to be recovered by the lower authorities, for the reason that the appellant was a 100% EOU, which is not entitled to claim for drawback. In the present appeal before the Tribunal, the appellant has argued that the lower authorities have incorrectly held that the status of the appellant was a 100% EOU, but the actual status was of a DTA unit. The difference of opinion between the learned Member (Judicial) as well as learned Member (Technical) has arisen on the question of jurisdiction of the Tribunal to entertain the present appeal. The relevant Section 129A of Customs Act, 1962 is reproduced below: "SECTION 129A. Appeals to the Appellate Tribunal. - (1) Any person aggrieved by any of the following orders may appeal to the Appellant Tribunal agai....
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....spute involves payment of drawback, and hence, the jurisdiction is barred. However, the learne3d Member (Judicial) has taken the view that Commissioner (Appeals), in the impugned order, has decided the issue whether the appellant is 100% EOU or not, and since the appellant has made the same plea in the present appeal, the present appeal is maintainable in terms of Section 129A. 11. I am of the view that the difference of opinion can be resolved by reference to the decision of the Three Member Bench in the case of Commissioner (Central Excise) vs. Jindal Stainless Steel Limited (Supra). The difference of opinion between the two Members in that case was also on the question of jurisdiction of the Tribunal, in relation to the admissibility of export rebate in Central Excise. The learned Member (Technical), while resolving the difference of opinion, has observed as follows: "As regards the second point of difference, the main dispute in this case is over the admissibility of export rebate under Rule 18 in respect of export of Ice buckets and Waste baskets. The issue of export rebate depends upon the issue of classification. In terms of first proviso to Section 35B(1), the T....