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2015 (3) TMI 900 - CGOVT - CustomsClaim of duty drawback - allegation that applicant had wrongly claimed and was sanctioned drawback claim at higher rate as applicant had availed Cenvat credit on the input services used in respect of impugned exported goods - Held that:- Rule 3(1) of the said Drawback Rules, 1995 stipulates that the amount of drawback can be reduced by taking into account the lesser duty or tax paid by way of rebate, refund or credit obtained. The plain wording of said provision reveal that if any amount has been availed as credit on any inputs, used in manufacture of final product, then such Cenvat credit should be reduced from eligible drawback. The rate of drawback applicable for different exports are notified by Government by issuing a Notification under Rule 3(1) of Drawback Rules after considering all the relevant factors including the amount of duty involved on inputs & input services. So, the drawback rate fixed has taken into account the service tax paid on input services also. As such department has accepted the availment of Cenvat credit and subsequent reversal of the same prior to export as non-availment of Cenvat credit on inputs. Government finds that once department accepted initial availing of Cenvat credit and subsequent reversal of same prior to export as non-availment of Cenvat facility on inputs, they cannot adopt different yardstick for input services whose credit was reversed subsequent to exports. Reversal of Cenvat credit before utilization amounts to non-taking of credit that such reversal can be done subsequent to export of goods. Government further observes that the department has treated availment of Cenvat credit on inputs and reversed subsequently before exports as non-availment of Cenvat credit on inputs and had allowed drawback at the higher rate @ 16% initially. At that time no dispute of non-reversal of Cenvat credit of input services was raised. The said point was raised subsequently and demand was raised on the ground that applicant had availed Cenvat credit of input services. It means original authority was also not clear about the issue in the beginning. So, no mala fide can be attributed to the applicant. Since, applicant has reversed the Cenvat credit in input services of ₹ 80,47,036/- along with interest of ₹ 31,74,220/- when the dispute arose and claimed that said amount was not utilized and remained in balance, so this reversal has also to be treated as non-availment of Cenvat credit on input services Government is of the considered opinion that applicant is entitled for drawback claims at higher rate @ 16% of FOB value of exports and therefore holds that the initial sanction of drawback claim @ 16% is legal & proper - Decided in favour of assessee.
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