TMI Blog2007 (2) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... olyspin Ltd., Rajapalayam being erroneously paid drawback amount. 2. Facts of the case are that, during 1999-00 to 2002-03, M/s. Polyspin Ltd., Rajapalayam, (henceforth, also, importer, PSL or appellants) had exported Polypropylene woven bags, made out of raw materials imported using DEPB licences purchased from the market, under claim for drawback and received Rs. 59,36,812/- as drawback at all industry rate. All the exports were made without claiming DEPB benefit. PSL had sourced the raw materials needed for production of the goods exported for claiming the disputed drawback either by discharging the basic customs duty and additional duty of customs with DEPB credit or, in certain cases only the basic customs duty discharged with DEPB s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that till the Larger Bench decision in M/s. Essar Steels Ltd. v. CCE, Vizag (Final Order No. 945/2004 -NBA dated 16-8-04), [ (173) E.L.T. 239 (Tri.-LB)J reversed a decision of the Double Member bench in M/s. SPIC Ltd. v. CCE, Chennai [ (61) RLT 671] and a similar earlier decision of the Single Member bench in Polyhose India Pvt. Ltd. v. Commr. - 2003 (152) E.L.T. 361 (T) on importers' entitlement to Modvat/Cenvat credit of CVD paid with DEPB credit, they were under the bona fide belief that duty payment with DEPB scrip had entitled them for drawback. Therefore longer period could not be invoked to recover the impugned drawback granted to them nor could any penalty be imposed on them. 5. Though the Show Cause Notice had proposed to deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eel case supra in support of his finding. In the impugned order, the Commissioner cited the provisions of Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1995 which empowered the proper officer of Customs to recover the erroneously paid draw back amount in terms of provisions of Section 142(1) of the Customs Act, 1962, if the claimant refused to repay such amount on demand. The demand was not barred by limitation. Accordingly he confirmed the demand for Rs. 59,36,812/- being erroneously allowed drawback to PSL. 7. In the appeal before us, the Learned Counsel has reiterated the arguments advanced before the Commissioner. The Learned Counsel invited our attention to the Circular No. 57/2004-Cus., dated 21-10-2004 in F. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be sustained. 8. We have carefully considered the case records and the rival submissions. We find that DEPB scheme is intended to neutralize the import duties suffered by the raw materials/inputs by allowing credit of such duties at notified rates on export of finished products. The importer had met liability to duties of customs on all related imports of the raw materials through DEPB scrips purchased from the market in the subject case. All the impugned exports had been made under claim for drawback under drawback Shipping Bills. The appellants had not claimed DEPB benefit for the said exports. In cases where they had paid CVD in cash on raw materials imported, they had not taken Modvat/Cenvat credit. Therefore it cannot be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation of deemed import duty charges on inputs used in the export product.Under the Scheme, the exporter first uses duty paid inputs in the manufacture of the export product and after exports he gets the duty credit at the notified rates. Thus, instead of refund of duty in cash after exports, a scrip in the form of DEPB is issued against the export product as duty remission. The exporter is at liberty to utilize the scrip for import of raw materials, components, etc. within the credit allowed in the DEPB or he may sell it to any other exporter. 4. In a case where the exporter sells the DEPB to another exporter, he gets cash of equivalent amount to pay customs duty on the import of raw materials and components. In this situation, he would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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