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2016 (5) TMI 558 - AT - CustomsEligibility of drawback and imposition of penalty - Section 114AA of the Customs Act, 1962 - Export of fabrics to Bangladesh to perform the job of CMT (Cutting/Making/Trimming) to make finished garments exported directly to Europe from Bangladesh - Sale proceeds are received by the appellant from third country from the buyer of the garments - Drawback disallowed as export of fabrics to Bangladesh does not involve sales and no foreign exchange remittances have come to the Appellant from its job workers in Bangladesh. Held that:- Rule 16A of DBK Rules, 1995 does refer to recovery of amount of DBK where sale proceeds are not realized. At the same time Rule 12(1)(b) and Rule 13(2)(i) also indicate that export of goods need not always be on a sale invoice or a Letter of Credit (LC). The above provisions convey that goods could be exported without a sale. The sale proceeds of the finished garments are received from the third country buyer and is received by the appellant directly from the garment purchaser which is more than the value of fabrics at which drawback is claimed. In the present case the products meant to realize foreign exchange are the 'garments' which are manufactured through job-workers in Bangladesh. The pattern of sale has been made clear by the exporter at the time of exports. Under the existing factual matrix of the case it can not be said that proceeds of the fabrics exported have not been realized and accordingly it is held that provisions of Rule 16A of the DBK Rules are not attracted. Drawback disallowed because as per the reports of the jurisdictional Central Excise officers the supporting manufactures of fabrics do not exist - Held that:- appellant has produced certificates from the jurisdictional Central Excise officers to the effect that supporting manufacturers of exported fabrics are not registered in their jurisdiction. If a manufacturing unit is exempted then it may not be registered with the jurisdictional Central Excise authorities. However, non-registration of units do not necessarily mean that such non-registered units are not existing. On this issue exporters were facing difficulty and CBEC vide Circular No.16/2009-Customs dated 25.05.2009 gave the clarification. Here, there is no point of questioning the Cenvat Credit taken by manufacturers of fabrics as those are not registered with Central Excise, which means no Cenvat Credit on inputs has been taken. Therefore, the Order-in-Original is set aside. - Decided in favour of appellant with consequential relief
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