9911796707
TMI Blog2012 (6) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... fixation of brand rate and draw back was sanctioned and paid to the appellant. Thereafter the department noticed that Diesel Engines are notified under Rule 3 of Draw Back Rules for the purpose of All Industry Rate of draw back vide Notification No.36/2005-Cus (NT) dated 02.05.2005, 81/2006-Cus (NT) dated 13.07.2006, 68/2007-Cus (NT) dated 16.07.2007, 103/2008 Cus (NT) dated 29.8.2008 and 84/2010-Cus (NT) dated 17.09.2010 during the relevant period and varying rate of draw back of 1% to 1= % was prescribed as All Industry Rate during the material period. Rule 6 of the Draw Back Rules provides for determination of the rate/amount of draw back on export goods for which no rate of draw back under Rule 3, i.e. All Industry Rate of draw back, has been determined by the Government. In their application under Rule 6, the appellant-exporter had declared that no All Industry Rate of draw back has been declared by the Government in respect of the goods exported by them. It was noticed that the amount of draw back sanctioned to the appellant under Rule 6 exceeded the All Industry Rate of draw back admissible to the appellant under Rule 3 by Rs.12,95,57,132/- during the period May, 2005 to Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 114 (iii) of the Customs Act, 1962. Hence the appellant is before us. 2. The learned Counsel for the appellant makes the following submissions:- (i) Though they had claimed the draw back under Rule 6 of the Draw Back Rules, in majority of the cases the All Industry Rate of Draw Back prescribed for IC (Diesel) Engines were less than 4/5th of the duty incidence suffered by them on the inputs used for the manufacture of export goods. Therefore, they are rightly entitled for claiming draw back under Rule 7 of the Draw Back Rules. If their application for draw back under Rule 7 is considered, then bulk of the demand raised confirmed against them would go away. (ii) When they made the application under Rule 6 for brand rate, they were under the impression that in as much as All Industry Rate of Draw Back prescribed under Rule 3 is far less then the duty incidence suffered by them on inputs, they are eligible for brand rate of draw back. Their application was considered by the competent authority and the draw back was sanctioned to them. The fact that the goods which they exported were notified under Rule 3 was equally known to the department and yet, the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Counsel also relies on the judgement of the Honble Apex Court in the case of Unichem Laboratories Ltd. vs. Collector of Central Excise - 2002 (145) ELT 502 wherein the apex court was considering the benefit of exemption under Notification No.234/86 dated 3.4.1986. In that case the applicant claimed the benefit under the said Notification in respect of bulk drugs and there was a requirement that the applicant should produce a certificate from the Drugs Controller. At the time of clearance of the goods, the applicant did not have the required certification and the same was obtained after a gap of 3= months. The department rejected the claim on the ground that at the time of clearance of the goods the appellant did not produce the requisite certificate and, therefore, not eligible for exemption. The honble apex court held that the Notification does not prescribe any time limit for filing the certificate of the manufacturer for claiming the exemption. Therefore, though the certificate has been produced subsequently, the appellant would still be eligible for the benefit of exemption under the Notification. 2.3 The learned Counsel also relies on the judgement of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Rate, they cannot now turn around and say that All Industry Rate prescribed for the IC Engines is less than 4/5th of the brand rate which they are entitled to under Rule 7. He also relies on the judgment of the Apex Court in the case of Chemicals and Fibres of India Ltd. vs. Union of India 1991 (54) ELT 3 (S.C.). In the said case, the honble apex court held that Rule 3 and Rule 6 of the Customs draw back Rules are mutually exclusive and relief under Rule 7 cannot be granted as relief under the said Rule is restricted for the cases where the margin of difference is substantial. He submits that ratio of this judgement would apply squarely to the facts of the present case and, accordingly he contends that the adjudicating authoritys finding that they are not eligible for draw back under Rule 7 is correct. He also relies on the judgement of the Larger Bench of this Tribunal in the case Jay Yuhshin Ltd. vs. CCE New Delhi as reported in 2000 (119) ELT 718 (Tri. LB) wherein it was held that if the scheme opted for by the assessee is found to have been misused, the existence of an alternate scheme would not be an acceptable defence and the said decision of the Larger Bench was upheld by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified is considered by the exporter as inadequate to compensate the duties or tax suffered on inputs used in the manufacture of export product. However, all the conditions and guidelines including the time limit prescribed for determination of drawback rate are the same for the claims made under Rule 6 and Rule 7 of the said Rules. 4. The Drawback Schedule 2005-2006 was notified aligning tariff items in the Schedule with those in the Customs tariff. In this elaborate exercise, the rates for certain tariff items could not be determined either due to non availability of data, as in the case of tariff item in dispute i.e. 3002 or consciously omitted to prescribe rate, as in the case of tariff items in Chapter 71. Thus, in so far as this particular tariff item is concerned, i.e. tariff item 3002, it is informed that the rate of drawback has not been determined by the Ministry. 5. It may be noted that all the conditions to be complied with for determination of the drawback rate under Rule 6 and Rule 7 are the same and therefore, the claim should not be rejected only on the ground that the claim was filed under Rule 6 instead of Rule 7. Even the Boards Circular No. 82 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixed in respect of the product exported. The appellant pleaded that their application be considered under Rule 7. The said claim was rejected on the ground that the request is hit by time limitation and the Honble High Court held as follows:- 13. The aforesaid order had also been cited before the respondent No. 2. However, the respondent No. 2 has sought to take shelter behind a very hyper technical plea, namely that in the present case he was deciding the application pursuant to directions given by the High Court to dispose of the application under Rule 6 of the Rules and as such could not consider the plea to fix the Brand rate under Rule 7 in accordance with the Drawback Rules. The respondent NO. 2 has also raised another specious plea to the effect that the plea is hit by limitation. On both counts the respondent No. 2 was not justified in not entertaining the request of the petitioner to consider the application as one under Rule 7 of the Rules. As recorded by the Additional Commissioner in the case cited hereinabove, there is no substantial difference in the format of the application whether under Rule 6 or Rule 7 of the Rules. As such, merely because the petitioner h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 7, without giving a positive finding the appellant is not eligible for draw back under Rule 7. He cannot out-rightly reject the claim of the appellant as being not eligible for benefit under Rule 7 without examining and considering their claim.. Similarly, the reliance placed on Jay Yuhshin Ltd.case (supra) also does not support the revenues cause. In that case, the Larger Bench of this Tribunal held that where the scheme opted for by the assessee is found to have been mis-used (in contradistinction to mere deviation or failure to observe all the conditions), the existence of an alternate scheme would not be an acceptable defence. The case before us is not one of misuse of any scheme. The appellant had exported the product manufactured by him and the question is what is the amount of draw back he is entitled to; whether it is the All Industry Rate under Rule 3 or the Special Brand Rate under Rule 7? To claim the benefit under Rule 7, certain terms and conditions have been prescribed. It is for the department to verify the claim of the appellant whether he satisfies the terms and conditions prescribed for sanction of draw back under Rule 7 and if so, grant the benefit and if not, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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