TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 1529
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....l Excise Duties Drawback Rules, 2017 can be claimed in respect of import of parts of calibration rigs on which manufacturing activity, that is, retrofitting operations are performed and thereafter the same is exported?" 2. The applicant has submitted as follows in the statement of relevant facts having a bearing on the question(s) on which advance ruling is required: That they manufacture and supply electromagnetic flowmeters, Coriolis mass flowmeters, vortex and ultrasonic flowmeters to Australia, South Africa, Singapore, Malaysia, Thailand and Indonesia. Additionally, they also supply vortex flowmeters to TLV Japan and intend to undertake retrofitting operations on imported "measuring section of second-hand calibration rigs". Such operations are required to extend the useful life of calibration rigs, and to incorporate current technological changes. It is imperative to note that only the measuring section in the calibration rigs will be imported into India on payment of applicable duties and taxes. During the retrofitting operations, the parts and components which have wear and tear or obsolete parts including all rubber components, seals, hydraulic and pneumatic valves, ac....
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....of drawback under Section 75 of the Customs Act read with Rule 3 and 7 of Drawback Rules, 2017 in respect of the proposed transaction. Further, the applicant states that the Section 75 of the Customs Act deals with the drawback on materials used in the manufacture of final products exported out of India as per the Rules framed thereunder. Relevant portion of Section 75 of the Customs Act is extracted below for case of reference: "SECTION 75. Drawback on imported materials used in the manufacture of goods which are exported. - (1) Where it appears to the Central Government that in respect of goods of any class or description manufactured, processed or on which any operation has been carried out in India, being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made under section 51 by the proper officer, or being goods entered for export by post under [clause (a) of section 84] and in respect of which an order permitting clearance for exportation has been made by the proper officer, a drawback should be allowed of duties of customs chargeable under this Act on any import....
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....ard is provided below: Scope of the term 'manufacture': The Applicant submits that the term 'manufacture' is defined in Section 2(e) of the Drawback Rules, 2017. It states that "manufacture" includes processing of or any other operation carried out on goods, and the term manufacturer shall be construed accordingly. Relevant portion is extracted below for reference: "(e) "manufacture" includes processing of or any other operation carried out on goods, and the term manufacturer shall be construed accordingly;" As is evident, the definition of 'manufacture' under the Drawback Rules, 2017 is inclusive in nature and covers any kind of processing or other operations. In the present case, during the retrofitting operations, the parts and components which have wear and tear or obsolete parts including all rubber components, seals, hydraulic and pneumatic valves, actuators, hose pipes, bearings, stepper motor, sensors, etc. will be replaced with new parts. These new parts are procured locally. Therefore, the present activity amounts to manufacture. The same is evident also from the fact that there is substantial value addition (mor....
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....s duties suffered on inputs used in the manufacture of final products exported. However, vide Budget 1995, an amendment was brought out in Section 75, whereby drawback was allowed for inputs not only used in manufacture, but also for processing or other operations for export of goods. The applicant has submitted that CBIC Vide Circular No. 57/95-Cus, dated 30.05.1995 also clarified this position, stating that the scope of drawback has been widened by amending the definition of "manufacture". Thus, this is evident that even if goods imported on payment of duties are not only used for manufacture but even if processed and exported, then also drawback under Section 75 would be available. Notification No 21/2004- CE (N.T.) dated 06.09.2004 issued under Rule 18 of the Central Excise Rules, 2002, allows rebate of duty paid on excisable goods for materials/inputs used in manufacture/ processing of export goods. Part V of Chapter 8 of Central Excise Law Manual also clearly clarifies that materials may be used for manufacture of processing i.e., processing not amounting to manufacture shall also be eligible for the benefit. The Hon'ble Supreme Court in the matter of K.R. Steel Union ....
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....(2) of Rule 3 of the Drawback Rules also establish a direct nexus between duty paid and the amount of duty to canvass that duty drawback is part of duty itself. Accordingly, drawback is nothing but a refund of duty which has been paid by the assessee and the same is therefore covered under Section 28H of Customs Act. The Drawback Rules have been notified by a Notification, exercising the powers conferred under Section 75 of the Customs Act and Section 37 of the Central Excise Act, 1944 (1 of 1944). Drawback Rates are also notified under Section 75 read with Rule 3 of the Drawback Rules. In view of these submissions, the applicant has contended that the application filed by the Applicant before Hon'ble Authority is maintainable in terms of Section 28H. 6. I have taken into consideration all the materials placed on record in respect of the application including the submissions made by the applicant during the course of personal hearing and other additional submissions reproduced (supra), I therefore procced to decide the present application on the basis of the information on record as well as the existing legal framework. 6.1 First and foremost, let me examine whether any s....
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.... (b) applicability of a notification issued under sub-section (1) of section- 25, having a bearing on the rate of duty; (c) the principles to be adopted for the purposes of determination of value of the goods under the provisions of the Customs Act, 1962 (d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act; (e) determination of origin of the goods in terms of the rules notified under the Customs Tariff Act, 1975 and matters relating thereto. (f) any other matter as the Central Government may, by notification, specify 7.1 In the present case, M/s. Endress+Hauser Flowtec (India) Pvt. Ltd. has sought Advance Ruling as to the following question: "Whether duty drawback in terms of Section 75 of the Customs Act, 1962 read with Rule 3 and 7 of Customs and Central Excise Duties Drawback Rules, 2017 can be claimed in respect of import of parts of calibration rigs on which manufacturing activity, that is, retrofi....
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....ry clear that the wordings used in the opening lines of the clause (d) of section 28(H) (2) starts with "applicability of notifications" issued in respect of: (i). tax or duties under Customs Act, 1962 or (ii). tax or duties under the Customs Tariff Act, 1975 or (iii). any tax or duty, chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act". Further, as per the dictionary meaning of the term "in respect of" simply means in connection with. The courts also have interpreted "in respect of" to mean connected with or attributable to. Thus, this clause is only connected with the Notification issued in respect of tax or duty under the Customs Act, 1962 or under the Customs Tariff Act, 1975 or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act. Needless to say that the duty under the Customs Act is charged and levied in terms of Section 12 of the Customs Act read with Section 2 and/or 3 of the Customs Tariff Act, 1975. It is further important to note that ....
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....any other law for the time being in force, on goods imported into, or exported from, India". Similarly, Section 2 of the Customs Tariff Act, 1975 reads as follows: "SECTION 2. Duties specified in the Schedules to be levied- The rates at which duties of customs shall be levied under the Customs Act. 1962 (52 of 1962), are specified in the First and Second Schedules". In fact, the chargeability/leviability of tax or duties and payability of refund/drawback are two different sets of mechanism under Custom Act for which separate provisions are made. It can be seen that the notification governing the Drawback Rules, 2017 has been issued by the Central Government in exercise of the powers conferred by section 75 of the Customs Act, 1962 (52 of 1962) and section 37 of the Central Excise Act, 1944 (1 of 1944), and not under the power vested under section 12 of the Customs Act or section 2 or 3 of the Customs Tariff Act. In the present case the matter on which Advance Ruling is sought pertains to duty drawback under section 75 of the Custom Act, which is not a duty/tax/levy/cess charged under either of the Customs Act or Customs Tariff Act. It is also to understand that provi....
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....ake upon itself the task of amending or alternating the statutory provisions. Wherever the language is clear the intention of the legislature is to be gathered from the language used. While doing so what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided. It is understood that in the clause (d) of the sub-section 2 of the section 28(H) of the Customs Act, 1962 there is not any mention of the word 'drawback' or refund with the words duty or tax. However, it is amply clear that the words 'chargeable' and 'leviable' are expressly mentioned in the same clause and it is observed that these words are associated with the words duty and tax. Therefore, addition of the word 'drawback' with the words duty or tax is unwarranted and extraneous. Further, in the case of Harshad Chiman Lal Modi vs. DLF Universal Ltd. (2005) 7 SCC 791, the Hon'ble Supreme Court held that "where a court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or....