TaxTMI 
TaxTMI 
2025 (7) TMI 1150
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....hiamethoxam 25% W/W). The aforesaid products are manufactured by the Petitioner by using various raw materials viz. Celite 209, Chlorantraniliprole (China) 50KG, Geropon TA 72. Pergopak M, Dispergator B Gran and Thiamethoxam Technical 60KG. It is the case of the Petitioner that it procured raw material required either by importing the same directly, on payment of appropriate customs duty, or by purchasing the same indigenously from one Deccan Fine Chemicals India Pvt. Ltd., (DFCL), a 100% Export Oriented Unit (EOU). During the relevant period, the Petitioner procured raw material for Thiamethoxam Technical 60KG valued at Rs.28,53,20,530 weighing 95,220kgs through DFCL for the purpose of manufacturing its export products. The said raw material was purchased under 17 different invoices, with distinct dates, mentioning the quantity in kgs as well as value of the product. DFCL, the supplier of the Petitioner had manufactured the material supplied to the Petitioner by importing raw material for which it initially received custom duty exemption as an 100% Export Oriented Unit in terms of the existing policy of the Government contained in the Notification dated 31.01.2003, as amended b....
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....ad thus: "Declaration We, M/s. Deccan Fine Chemicals (India) Private Limited (100% EOU), Santa Monica Works, Corlim Ilhas, Goa-403110, here by declare that, we have reversed the whole of customs duty specified under the 1st schedule to the Customs Tariff act, 1975 (BCD) in proportionate of imported inputs used in the "Thiamethoxam Technical 60KG" as per the Trade Notice no.11/2018 dtd. 30.06.2017 issued by DGFT, New Delhi & as per para 6.08 of FTP 2015-20. We also declare that, the said custom duty is included in the cost of "Thiamethoxam Technical 60KG" which is sold in DTA to M/s. Syngenta India Limited, Santa Monica Works, Corlim Ilhas, Goa-403110. Details of "Thiamethoxam Technical 60KG" invoices sold from M/s. Deccan Fine Chemicals (India) Private Limited (100% ZOU) to DTA M/s. Syngenta India Limited, Goa is as per below: INVOICE NUMBER INVOICE DATE UNIT VALUE (RS.) TARIFF CUSTOM DUTY (RS.) SOCIAL WELFARE SURCHARGE TOTAL DUTY (RS.) 200030090 21-Sep-18 KGS 7980 30,842,700.00 3808 1,840,110.00 184,042.00 2,024,152.00 - 0030135 14-Jan-19 KGS 3960 15,305,400.00 3808 603,010.00 60,285.0....
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....t Drawback of Rs. 9,53,46,136.27 in all the eight applications and each of the application seek fixation Page 7 of 21 8th July, 2025 of brand rate of duty drawback under Rule 7(1) of The Customs and Central Excise Duties Drawback Rules, 2017 addressed to the Commissioner of Customs, offering the details of the gross amount of Drawback claim, along with the amount of All Industry Rate (AIR) of Drawback and the net amount of Drawback Claim excluding the amount of AIR of drawback. 6. In respect of the three applications preferred by the Petitioner, the brand rate was fixed and he was permitted provisional drawback of 90% of the total amount of brand rate fixed and the provisional drawback to the tune of Rs. 1,78,33,292.64 was sanctioned in his favour. While the Assistant Commissioner allowed the 90% of drawback in terms of Rule 7(3) of the CGST Draw Back Rules, 2017, the communication noted that the remaining amount is pending for verification/defacement of original documents. However, on the basis of the available documents, it is recorded that one of the inputs "Thiamethoxam Technical 60KG" procured from EOU an import duty is reversed by the EOU, i.e. M/s. Deccan Fine Chemicals L....
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....ed to drawback of the same." 9. Without taking into consideration the explanation offered, the Joint Commissioner in relation to the fixation of brand rate of duty drawback under the Drawback Rules, 2017 reached a conclusion that in terms of Notification No. 59/2017-cus dated 30.06.2017 read with Para 6.08 of FTP-2015-20 and Trade Notice No.11/2018 dated 30.06.2017 issued by DGFT, it was obligatory on the part of M/s. Deccan Fine Chemicals India Private Limited, (EOU) to reverse the quantum of duty exemption availed at the time of import, if the said Item is to be cleared in the Domestic Tariff Area by it. Rejecting the contention with regards to burden of import duty by recording, that the actual payment of the customs duty is not made on import of the product and the declaration given by M/s. Deccan Fine Chemicals Limited, mentioning that the import duty is reversed by them do not qualify for the customer to avail the drawback, as the same is not borne by their customer and even if the customs duty is included in the cost of raw material/input, it is only upon the tax being paid by the customer on purchase from the EOU, was held that applicant would be entitled for set off by ....
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.... a rebate of customs duty on the inputs used in the manufacture of goods, he had faulted as while furnishing the details of duty incidents on imported components on the goods with the description Thiamethoxam Technical 60KG, claimed vide two distinct bill of entries with the quantity 7.200 + 7.200, it furnished the same value in the column of assessable value (RS) as well as the assessable value for custom duty (RS). These entries prompted the Joint Commissioner who passed the order in original to conclude that in the absence of documentary evidence being produced on record to establish that the import duty is paid by the applicant, its claim to drawback duty reversed by EOU and not paid by the applicant disentitle it to the benefit. 12. Chapter V of the Customs Act, 1962 provide for levy of duty of custom under the Customs Tariff Act, 1975 on goods imported into or exported from India and it also provide date of determination of rate of duty and tariff valuation of imported goods and exported goods. Section 17 in the said Chapter, specify that an importer entering any imported goods or an exporter entering any export goods shall be liable for payment of duty leviable on such go....
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.... been paid by the DFCL, and in the tax invoice raised by it on the Petitioner, it had specifically marked that for the concession availed for payment of customs duty on imported inputs under Rule 5 of the Customs Rules, 2017, they shall pay equivalent custom duty along with imported inputs used in manufacture of above quantity of finished goods sold under DTA. In addition, the DFCL also gave declaration in respect of each drawback application filed by the Petitioner, furnishing the details of the customs duty and social welfare surcharge paid by it on the supplies made by it to the Petitioner. The declaration specifically state that the duty so paid is included in the cost of material which is sold to the Petitioner and DFCL did not have any objection if the duty drawback is paid by the Petitioner. When it is not in dispute that the Petitioner has paid the entire amount to DFCL, it is evident that the incidence of the duties paid by DFCL is borne by the Petitioner and therefore the Petitioner is eligible to claim drawback of the same. However, the Authority has erroneously rejected the claim on the ground that the Petitioner has not borne the incidence of customs duty paid by DF....
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....al welfare surcharge paid by the DFCL was included in the price that was charged to the Petitioner for the input products, reflecting that it was borne by the Petitioner. In complete ignorance of the declaration given by DFCL as well as the challans by which the DFCL had paid the customs duty and social welfare surcharge, the Authorities have erred in holding that the custom duty did not include the cost of input item since the value indicated in the invoice is the same as assessable value disclosed in the drawback DBK (Drawback-IIA) Statement filed by the Petitioner which was an inadvertent mistake. 17. The Petitioner during the revision proceedings tendered invoice-wise details of the assessable value for custom purposes, setting out the duty paid by DFCL and invoice valued but despite the presumption under Section 29D and the documents furnished, the stand of the Petitioner was not found to be acceptable to the Authorities. It is worth to note that there is no provision under the Customs Act, 1962 or the Drawback Rules, 2017 requiring that the customs duty claimed as drawback must be indicated/included in the tax invoice, issued by DFCL which is governed by the provisions ....