TMI Blog2010 (7) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the assessee.. - 375/8-9/DBK/ 2010-RA-Cus - 214-215/2010-Cus. - Dated:- 6-7-2010 - Shri D.P. Singh, Joint Secretary, J. REPRESENTED BY : Shri Ramesh Nair, Advocate, for the Assessee. Shri K.L. Baria, Superintendent, ICD, Malanpur, for the Department. [Order]. These two Revision Applications have been filed by the same applicant M/s. Sterling Agro Industries Ltd., Malanpur, M.P., against the respective Order-in-Appeal No. (i) IND-I/257/2009 dated 30-10-2009 and (ii) IND-I/258/09 dated 30-10-2009 passed by the Commissioner (Appeal-I) Customs Central Excise, Indore, with respect to respective Order-in-Original No. 01/Cus/AC/ICD/ MLP/2009, dated 30-5-2009 and (ii) 02/Cus/AC/ICD/ MLP/2009 dated 5-6-2009 both as passed by the jurisdiction Assistant Commissioner of Customs ICD, Malanpur. 2. The common brief facts of both the cases are that the applicant M/s. Sterling Agro Industries Ltd. were engaged in the manufacture and export of Skimmed/Full Cream Milk Powders and Butter Oil etc. The applicant had filed drawback claim of (i) Rs. 1,10,79,147/- and (ii) Rs. 8,68,975/- an account of Exports goods under Notification No. 68/2007-Cus. (N.T.), dated 1-7-2007 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) has taken a detailed note regarding payment of duty of Rs. 22,06,762/- alongwith interest on the packing material namely MS Drums Multiwall papers procured by the Applicant without payment of duty under Rule 19(2) of Central Excise Rules, 2002 to exit from Rule 19(2) and in order to comply the condition of Duty Drawback Rules, 1995. However the Ld. Commissioner (appeals) did not whisper a single word on this issue. 3.2 The Ld. Commissioner (Appeals) has wrongly contended that there are different authority in respect of procurement of duty free goods under Rule-19(2) of Central Excise Rule, 2002 that is Central Excise Division-Gwalior and for drawback claim the, authority is Assistant Commissioner, ICD, Malanpur. This is apparently incorrect for the reason the officer the Assistant Commissioner is the same authority who has granted the permission for procurement of duty free packing material under Rule 19(2) and the same officer has sanctioned the drawback. 3.3 The Ld. Commissioner (Appeals) has not dealt with the submission given by the applicant in regard to the legal position that the drawback claimed by the applicant is only of customs @ 1% and the same does not incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit can be utilized by the exporter for payment of duty on sales made in India or refund of the same can be claimed under Rule 5 of the Cenvat Credit Rules, 2004. This will eliminate the duty burden suffered by the exporter on inputs. In this regard following judgment is relied upon. (i) CCE, Kanpur v. Meghdoot Pistons (P) Ltd. - 2006 (201) E.L.T. 398 (Tri.-Del.) (ii) Jobelle v. CCE, 2006 (203) E.L.T. 627 = 2006 (4) S.T.R. 365 (Tribunal) (iii) Repro India Ltd. v. UOI, 2009 (235) E.L.T. 614 (Bom.) 3.9 Instead of utilization of Cenvat credit for payment of duty or opting for the refund mechanism prescribed under Rule 5 of the Cenvat Credit Rules, 2004, the applicant procured the M.S. Drums and Multiwall Papers without payment of excise duty under Rule 19(2) of the Central Excise Rules, 2002. The ultimate result remains same in both the situations i.e. elimination of duty burden on inputs used in the export goods. Any finding in terms of clause (ii) of record proviso to Rule 3(i) of Customs, Central Excise Duties and Service Tax Drawbacks Rules, 1995 by interpreting them in isolation is improper. 3.10 It is further clarified that the first proviso to Rule 3 of Dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal reversing/setting aside the order of the Assistant Commissioner than only any demand of sanctioned drawback can be confirmed. 3.13 In support of this settled position of law, the Applicant rely upon the following judgments : (i) Overseas Engineers v. CCE, Rajkot - 2007 (215) E.L.T. 513 (Tri. - Ahmd.) (ii) Voltas Ltd. v. CCE, Hyderabad - 2006 (202) E.L.T. 355 (Tri. - Bang.) (iii) Dynamatic Technologies Ltd. v. UOI - 2005 (186) E.L.T. 277 (Kar.) (iv) Forbes Gokak Ltd. v. CCE, Belgaum - 2005 (182) E.L.T. 219 (Tri. - Bang.) (v) D.C.W. Ltd. v. Asstt. CCE, Tuticorin - 2004 (166) E.L.T. 169 (Mad.) (vi) Sree Digvijay Cement Co. Ltd. v. Collector of C. Ex. - 1991 (52) E.L.T. 631 (Tribunal) (vii) Kelvinator of India v. CCE, Faridabad - 2005 (179) E.L.T. 355 (Tri.-Del.) (viii) La Opala RG Ltd. v. CCE, JSR - 2002 (149) E.L.T. 164 (Tri. - Kolkata) (ix) Priya Blue Industries Ltd. v. CCE (Preventive) - 2004 (172) E.L.T. 145 (S.C.) (x) Collector of C. Ex., Kanpur v. Flock (India) Pvt. Ltd. - 2000 (120) E.L.T. 285 (S.C.) (xi) Vittesse Export Import v. CCE (EP), Mumbai - 2008 (224) E.L.T. 241 (Tri-Mumbai) (xii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable services in respect of which duties or taxes have not been paid; or iii iv v. 4.2 The view expressed by the Commissioner (Appeals) were also confirmed by the Hon ble Supreme Court in case of Rubfila International Ltd. v. Commissioner [2008 (224) E.L.T. A133 (S.C.)] upholding the Tribunals order as under :- The Appellate Tribunal in its impugned order had held that even though All Industry Rate was fixed for a particular export product, applicable to all exporters who export the products, when there is evidence that inputs had not suffered any duty mischief of Rule 3(1)(ii) of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 was attracted and no drawback can be claimed. 4.3 Further the Government of India in the RA of M/s. Tata International Ltd. reported in 2009 (246) E.L.T. 767 (GOI) has also decided that if the condition of the notification is not fulfilled the DBK is not admissible. In the said case the DBK was denied on the ground of simultaneous availment of DEPB on inputs and DBK on export. In para 12 of the order of the Government of India. It is held that :- the plea of the respondents that actual du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of sub-Rule (2) of Rule 19(2) of the Central Excise Rules, 2002. Therefore All Industry rate or Duty drawback, even the customs component, cannot be availed of when the inputs used in the manufacturing the export goods were procured either duty free under Rule 19(2) of the Central Excise Rules, 2002 or when rebate of duty paid on them had been taken under Rule 18 of the Central Excise Rules 2002. In the instant case also party has availed benefit of duty free inputs under Rule 19(2) of the Central Excise Rules, 2002 as well as drawback of All Industry rate on exported goods which is manufactured or produced by using duty free inputs under Rule 19(2) of the Central Excise Rules, 2002. Hence Drawback is not admissible as per above said clarification also. 5. The personal hearing in this case has scheduled and held on 13-5-2010 which was attended by Sh. Ramesh Nair Advocate for and on behalf of the Applicant and by Sh. K.L. Baria, Superintendent ICD, Malanpur from the office of the Respondent-Commissioner. Both of them have made their respective submissions which consisted of re-itrations of Grounds/facts as already on record. 6. Government has carefully gone through the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting above Drawback). The above availed Cenvat can be on cashed by way of refund mechanism - prescribed under Rule 5 of the Cenvat Credit Rules, 2004 without effecting - Drawback involved. 8.3 The condition of non-availment of input benefit under Rule 19(2) read with Notification No. 43/2001-C.E. (N.T.) stand complied with as the applicant has paid back whole of Excise Duty of Rs. 22,06,762/- along with interest of Rs. 2,57,385/- on the Entire inputs so procured. 9. In reference to above Government is of considered opinion that Customs and Central Excise Duties Drawback Rules, 1995 are in itself a complete statute and has inbuilt mechanism to dealt with the correction/consequences of any contravention of provisions contained therein. These are not dependent or bound by other sections of the Customs Act, 1962 because importing and imposing gap conditions of requirement of any other sections of either of the main Central Excise Act, 1944 and/or Customs Act, 1962 would make such inbuilt provisions of Drawback Rules as redundant. 10. On the point 8.1 above Government is in conformity with the view s of the appellate Commissioner that when Judgments of the Apex Court in M/s. Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wback specified in the drawback schedule shall not be applicable to export of a commodity or product which is manufactured or exported either by availing the rebate of duty paid on materials used in the manufacture or processing of such commodity or product in terms of Rule 18 of the Central Excise Rules, 2002 or manufactured or exported in terms of sub-rule (2) of Rule 19(2) of the Central Excise Rules 2002. Therefore, All Industry Rates of Duty Drawback, even the customs component, cannot be availed of when the inputs used in manufacturing the exported goods were procured either duty free under Rule 19(2) of the Central Excise Rules, 2002 or when rebate of duty paid on them had been taken under Rule 18 of the Central Excise Rules, 2002. In view of above clarification of Central Board of Excise . Customs, no drawback is admissible in this case. 13. On the point 8.3 above, Government is not inclined to accept the self Interpretation of benefit of duty amounts to non-availment of input benefit under Rule 19(2) read with Notification Nos. 43/2001-C.E. (N.T.) because Neither there is any such provision under any of the Rules/Regulations nor it alters the factual position as was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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