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2018 (8) TMI 1934 - CGOVT - CustomsRecovery of Duty Drawback - Commissioner (Appeals) restricted the recovery of drawback relating to the packaging materials only and allowed drawback on other inputs - the revision application has been filed by the applicant mainly on the ground that the All Industry Rates are average rates and the department cannot check duty paid character of inputs; that the inputs were not procured under Rule 19(2) of Central Excise Rules, 2002; that the inputs were procured from unregistered SSI units against ‘H’ form; that no method/authority is prescribed for reduction of all industry rates of drawback under the Drawback Rules, 1995 and the recovery of drawback can be effected within a reasonable period only. HELD THAT:- The Government has examined the matter and found force in the argument of the applicant that the All Industry Rates of Drawback are fixed by the Government after considering the average incidence of duty and taxes on the inputs and services used in the exported products. Thus these are general rates and drawback at All Industry Rates is payable in respect of the export goods to the exporter without examining the duty paid character of each input. The applicability of these rates to different commodities is certainly subject to Drawback Rules, 1995 and Notification Nos. 68/2007-Cus. (N.T.), dated 16-7-2007, 103/2008-Cus. (N.T.), dated 29-8-2008, 84/2010-Cus. (N.T.), dated 17-9-2010 and 68/2011-Cus. (N.T.), dated 22-9-2011. One of such conditions stipulated in all the above said notifications as per which the All Industry Rate shall not be applicable to a commodity was that the exported goods should not have been manufactured or exported by availing the rebate of duty on material used in the manufacture of such commodity or manufactured or exported in terms of sub-rule (2) of Rule 19 of Central Excise Rules, 2002. But no such case has been made out in the Order-in-Original and Order-in-Appeal that the applicant had manufactured and exported the goods by availing the rebate of duty on inputs or by availing the facility provided under sub-rule (2) of Rule 19 of Central Excise Rules, 2002. Therefore, there is no basis for denying the drawback of duty at All Industries Rate in this case or restricting it to few inputs only for the reason that the packaging materials were procured without payment of duty from unregistered units. The Government agrees with the contention of the applicant that the Commissioner (Appeals) has passed the Order-in-Appeal erroneously by denying the drawback of duty on packaging materials on the ground that these were procured without payment of Central Excise duty from unregistered unit against form ‘H’ issued by the State VAT. The error of denying the drawback in the above situation seems to have been realised by the respondent itself subsequently inasmuch as no such action was initiated against any of such exporter after show cause notice was issued in this case as per the RTI reply of the Deputy Commissioner, ICD, Agra itself. Revision application allowed.
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