TaxTMI 
TaxTMI 
TaxTMI 
2008 (4) TMI 151
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....4-2005, the appellant no. 1 started exporting similar goods by filing shipping bills under drawback scheme classifying the aforesaid goods under serial No. 732303 of the Drawback Schedule (hereinafter referred to as Schedule) by claiming the drawback @ 11% with a cap of Rs. 8.10 per kg. On 2-9-05, vide Notfn. No. 77/2005-Cus. (N.T.) Serial No. 8215 of the Schedule was bifurcated into two parts i.e. 821501 and 821502. Serial No. 821501 covered spoons, forks, ladles, skimmers, cake servers, fish knives, butter knives, sugar tongs and similar kitchen or tableware of Stainless steel, therein the drawback rate was 11% with a cap of Rs. 24.50 per kg. On and from that date i.e. 2-9-2005, the appellant no. 1 started classifying their products under the aforesaid heading 821501 of the Schedule so that they could take benefit of the higher cap value of Rs. 24.50 per kg. In all, they filed 31 shipping bills claiming drawback of Rs. 68,02,676.80, which was paid to them as per the procedure. On suspicion, the statement of Shri Mukesh Kantilal Mehta (hereinafter referred to as appellant no. 2), partner of appellant no. 1 was recorded on 8-3-2006. He inter alia admitted that the goods were the sa....
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....o confiscation and the appellants were not liable to penalty. They, were also heard in person and after going through the submissions, the adjudicating authority i.e. Commissioner of Customs (Nhava Sheva) ordered for (a) confiscation of goods exported under 31 shipping bills valued at Rs. 6,24,34,869/- u/s 113h(ii) of the Customs Act, 1962. However, he also allowed the same to be redeemed on payment of redemption fine of Rs. 25 lakhs. He al lowed the drawback amount of Rs. 22,66,328/- and ordered recovery of Rs. 45,36,349/- with interest under Rule 16 of the Drawback Rules, 1995. He also imposed the penalty of Rs. 5 lakhs on appellant no. 1 and a penalty of similar amount on appellant no. 2 under section 114 of the Customs Act. 5. Both the appellants filed appeals mainly on the grounds that under the scheme of drawback, the quantum of drawback is fixed taking into consideration the duty incurred on the inputs or the raw material as well as on the packing material used. The drawback rates are fixed considering the guidelines in Drawback Rules 1995. Before allowing the goods for export under claim for drawback, thorough examination and scrutiny of documents and the goods are carried....
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....ut Jewelry making", the free dictionary by Forlex and Wikipedia, the free en cyclopedia. He further stated that the stainless steel kitchen and tableware were specifically included in the Schedule w,e.f. 2-9-05. Regarding use of the word 'similar' in Heading 8215, he pleaded that the doctrine of Edjusdem Genesis will support the view that the items of similar nature shall be classifiable in heading 821501 of the Schedule. According to him, the word similar was expansive and not restrictive. On limitation, he argued that the demand for recovery of drawback was made under Rule 16 of the Drawback Rules 1995; but the amount was in the nature of duty and duty could be recovered only under Section 11A of the Central Excise Act or under Section 28 of the Customs Act. The limitation for issuing, a notice for recovery would be same as mentioned in Section 28 of the Customs Act. He relied on the following decisions for the above proposition: (i) Leela Scottish Lece Ltd. v. Commissioner of Customs Bangalore reported in 2003 (159) E.L.T. 477 (ii) Kaling Vanidhya v. Chennai reported in 2007 (207) E.L.T. 667 Madras. (iii) Surinder Singh v. Union of India as reported in 2006 (204) E.L.T. 534 D....
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....en two, the substantive statute will prevail, 6.6 In short, the Counsel pleaded that the notice issued for recovery of the erroneously paid drawback was barred by limitation as the same was issued after 6 months from the date of payment and there was no allegation for invoking larger period, 6.7 Notwithstanding the above submissions and as an alternate plea the appellants stated that they are eligible to the drawback of Rs. 7,96,586.80 out of Rs. 45,36,349/- disallowed as cake saver, finger soup, food saver, stainers and collander as listed in para 4(ii) of their appeal memo are in the nature of the items of CTH 8215. 7. The learned Joint CDR Shri B.K. Singh made the following submissions: 7.1 Both headings 7323 and 8215 (after amendment) cover tableware and kitchenware. Both the headings cover the goods manufactured out of Stainless Steel. Heading 7323 includes goods made of steel. Stainless steel is only a variety of steel and, therefore, the .goods covered under heading 7323 include goods made of stainless steel. In fact, prior to 2-9-2005, the appellants were classifying the identical products under the heading 7323 of the Schedule. At this stage, they cannot argue that the....
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.... the expression "and the like" occurring in entry 210311 of the Central Excise Schedule, which read as 'sauces, ketchup and the like and preparation thereof'. The appellants therein pleaded that 'pan chutney' should also be classified under 210311 as the words "and the like" covered pan chutney also. Applying the doctrine of Noscittur a Sociis, the Tribunal held that pan chutney is not classifiable in 2103.11 as said goods is not in the nature of sauce and ketchup. Similar views were expressed in the case of Oswal Agro Mills Ltd. [1993 (66) E.L.T. 37] and in the case of Bharat Electronics Ltd. v. CCE, Bangalore[2006 (199) E.L.T. 498 (Tri.-Bang.). 7.3 The learned Joint CDR, thereafter, referred to the arguments of the counsel for the appellants regarding the applicability of the provisions of Section 28 of the Customs Act for the purpose of issuing the SCN for the recovery of the drawback amount. For pleading time bar, the appellants had relied upon the following decisions: (i) Leela Scottish Lace v. CCE, Bangalore [2003 (159) E.L.T. 477] (ii) Kaling Vanidhya v. CC, Chennai [2007 (207) E.L.T. 667 (Mad.)] (iii) Surender Singh v. U.O.I [2006 (204) E.L.T. 534] (iv) CCE, Madras v. ....
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.... the said rules, where the drawback rate/amount is being contemplated that there is a mention of subject to the provisions of Customs Act and CE Act. The Joint CDR relied on the decision of JS(RA) in the case of In Re: Partha Exports reported in 2002 (143) E.L.T. 465 (GOI) wherein it was specifically heldthat there is no time limit for recovery of the erroneously paid drawback. 7.6 The learned Joint CDR commented on the applicability of the cases referred to by the counsel for the appellants in the following manner (a) The reliance placed by the appellants in Ispat Industries (supra) is erroneous as in that case the issue was applicability of a particular rule of Custom Valuation Rules, 1988, which was issued under Section 14 of the Customs Act and in that context, the Hon'ble Court held that if there is a conflict between Section 14 and the Custom Valuation Rules issued under the same Section, it will be Section 14 of the Act which will prevail. (b) In Kaling Vanidhya (supra), the Hon'ble High Court had directed the Adjudicating Authority to consider the plea of the appellant on limitation. It did not give any finding on the applicability of Section 28 of the Customs Act to Rul....
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.... order given by the buyer. (ii) Stainless Steel (SS) product were kept in heading 8215 of the Draw back Schedule and that of iron & steel kitchenware/tableware were placed in heading 7323 of the Drawback Schedule. The exported goods were of SS and not of iron & steel. (iii) During the relevant, period, the Drawback Schedule was not aligned to the Customs Tariff or the Harmonized System of Nomenclature (HSN). (iv) In Para 4(ii) of the appeal memo, the appellants have pleaded that the doctrine of ejusdem generis supports the view that the items of similar nature shall be classifiable in CTH 8215. (v) That the definition of tableware and kitchenware covers the exported goods and they have relied upon the definition extracted from Answers.com, Oxford Dictionary and Cambridge Dictionary among others. (vi) There is no dispute in regard to the quantity, quality and the value of goods. Those have been found to be correct. (vii) There is no element of mens rea and hence the penalty cannot be imposed. (viii)The demand for the recovery of drawback in this case has been made under Rule 16 of the Drawback Schedule, 1995. However, the amount was in the nature of duty and duty demand was t....
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....loves and like, of iron and steel. The said heading was further divided in three sub-headings. 732301 covered "of stainless steel with nickel content more than4%". 732302 covered "copper bottomed utensil" 732303 covered "others" At the same time, heading 8215 of the DBK Schedule read as 8215 Spoons, forks, ladles, skimmers, cake servers, fish knives, butter knives, sugar tongs and similar kitchen or tableware. 11. There is no dispute that prior of 2-9-2005, the appellants were claiming the drawback on their goods under heading 732303 as table and kitchen articles of Stainless Steel. However, on 2-9-2005, by amendment vide Notification No. 77/2005-Cus. (N.T.), heading 8215 of DBK Schedule was split in two. The amended heading read as under : - 821501 of Stainless Steel 821502 of others. 12. The appellants argued that their products were table and kitchen ware made of stainless steel. They have further argued that the stainless steel is costlier and, therefore, the drawback rate was higher for the table ware and kitchenware of stainless steel. He also referred to the word 'similar' occurring ....
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....ading 8215 covers by way of example, articles of tableware and kitchenware, which are used for handling food/drink and not for storing or keeping them. 14. A perusal of both the headings reveals that heading 7323 is general whereas 8215 is specific as entry 8215 enumerates articles of kitchenware and tableware, which are to be classified there. These two entries have to be harmoniously construed so as to give meaning to each of them. Any interpretation, which makes any of the headings otiose, has to be discarded. If we interpret that all kitchen or tableware are covered in heading 8215 then the words "table and kitchen articles" occurring in heading 7323 will be redundant. Such an interpretation will be repugnant to the DBK Schedule as part of entry 7323 will be made otiose. The scope of heading 8215 has to be defined considering this view. The said entry has already been extracted earlier. The words spoons, forks, ladles, skimmers, fish knives, etc. precede the expression "similar kitchen or tableware". It is to be examined whether the rule of Ejusdem Generis can be applied to limit the scope of similar kitchen or tableware occurring in heading 8215 of the DBK Schedule. As enunci....
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.... and toilet goods. The assessee argued that 'dhoop' is also a perfumery and hence should be classified in the same entry. The Hon'ble Supreme Court applied the doctrine of Nosittur a Sociis to hold that the word perfumery draws its colour from the words "cosmetics and toilet goods", which will refer to only such articles of perfumery as are used as cosmetics and toilet goods. Similarly, in this case also similar kitchen or tableware draws its colour from spoon, tongs, ladles and its scope will be limited to food/drink handling (flatware or cutlery) articles. The aforesaid decisions leave no doubt that in entry 8215, the scope of phrase similar kitchen or tableware is to be considered by applying both the doctrines i.e. Nosittur a Sociis and Ejusdem Generis. By applying both or one of them, the scope of the entry 8215 is limited to only those articles, which are used for handling food or drink, and not for storing or keeping the goods such as jars, plates, jugs, etc, Thus the jars, jugs, etc., which are essential for storing or keeping food/other articles will not be classifiable under heading 8215 of the DBK Schedule but will be classifiable only under 732303, if those are manufact....
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.... short-paid. They fall into two distinct and different categories altogether with basic as well as substantial differences to distinguish them from each other". In the same para the Hon'ble Supreme Court observed that - "Section 11A is not an omnibus provision which provides any period of limitation for all or any and every kind of actions to be taken under the Act or the Rules but will be attracted only to cases where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded. The situation on hand and the one which has to be dealt with under Rule 57-1, as it stood unamended, does not fall under anyone of those contingencies provided for in Section 11 A of the Act". In the end the Hon'ble Supreme Court observed that: "For all reasons stated above, we are of the view that the provisions of Section 11A of the Central Excises and Salt Act, 1944, would have no application to any action taken under Rule 57-I of the Central Excises and Salt Rules, 1944, prior to its amendment on 6-10-1988, and Rule 57-1 of the Rules are not in arty manner subject to Section 11A of the Act. Hence, we approve of the view taken by the Gujarat Hig....
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....Drawback Rules are not subject to the provisions of Section 28 of the Customs Act or Section 11A of the CE Act, no limitation can be read into Rule 16 of the Duty Drawback Rules, 1995. 18. The learned Joint CDR has relied upon the decision of JS(RA) in the case of In Re : Partha Exports reported in 2002 (143) E.L.T. 465 (GOI) wherein it was specifically held that there is no time limit for the recovery of erroneously paid drawback. Although, such decisions of GOI are not binding on us but those certainly have persuasive value. 19.1 The decisions relied upon by the counsel for the appellants are not squarely applicable in this case. Further, none of those decisions had referred to the decision of the Hon'ble apex Court in the case of Raghuvar (India) (supra). 19.2 Relying on the decision of the Hon'ble Supreme Court in the case of Raghuvar (India) and drawing support from the GOI decision in the case of Partha Exports (supra), we hold that there is no time limit for the recovery of the erroneously paid drawback recoverable under Rule 16 of the Drawback Rules, 1995 as amended. 20. As regards the appellants' claim that they are eligible to the draw back of Rs. 7,96586.80 out of Rs....