TMI Blog2012 (10) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 with the issuance of Circular No.8/2003 it has been decided that instead these manufacturer exporters and merchant exporters with a supporting manufacturer shall be required to give a self-declaration that such manufacturer-exporters or the supporting manufacturers are not registered with Central Excise and that they do not avail / have not availed Cenvat facility. The form of self-declaration is enclosed. The assessee is not a manufacturer but only procures or sources goods from the Indian market and exports them. Therefore, it availed the benefit of All India rates of duty drawback, a notional concept applicable to such class of exporters. None of the circulars cited by the department required the assessee to follow the procedure which is now mandated, in 2009. The previous circulars of 1997 and 1998 as well as the circular of 2003 clearly visualized that duty drawback was restricted, excluding duty credit availed, in the case of manufacturers who also got their job work done. Exporters of goods purchased from the market were to be treated as having availed Modvat facility. Thus the exports had been finalized and duty drawback paid as long back as in 2006-2007, the attempt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged that the procedure applicable and spelt out in a Circular No.44/2001 had not been complied with. The respondent replied, inter-alia, stating that the demand pertained to a period beyond five years and was time barred. It was also urged that the drawback claimed and admitted was in accordance with the procedure and formalities prescribed under the Customs and Central Excise Drawback Rules, 1995. A declaration in terms of Rule 12 of the Rules was made by the respondent on the shipping bills that no drawback claim for rebate of duty has been sought in respect of the Customs and Central Excise duty paid on materials, containers etc. The respondent also alleged that they had given a declaration that no CENVAT Credit had been allowed on exported goods. The reply to the show cause notice also stated that Circular No.8/2003 (dated 17th February, 2003) had been complied with as the same was in force and that being a merchant exporter, a self-declaration that no CENVAT Credit was claimed was sufficient to enable the duty drawback. 4. By the order in original dated 20th October, 2009, the Commissioner of Customs rejected the respondent‟s contentions and demanded a sum of Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs (Export) relied on Circulars Nos.17/97 and 64/98. However, it was noticed at the same time that none of these was relied on in the Show cause Notice. In fact, Circular No.19/09-Cus could not have been relied upon because it was issued much after the Show cause notice was issued. 8. The Tribunal proceeded to over-rule the Commissioner‟s argument and held as follows:- 12. On a careful reading of paras 1 and 6 as also from item 4 of Annexure-I and items 4 and 5 of Annexure-II of Circular 54/2001-Cus it is clear that this circular and certificates as per this Circular are not applicable for merchant exporters who buy goods from open market and we have no difficulty in concluding that this circular is not applicable to merchant exporters who procure goods from the open market and the Appellant was not required to give such certificates. So the very basis of on which SCN is issued is not sound. 13. The only issue to be examined is whether the demand is to be sustained in view of para(iv) of Circular 17/97-Cus and para (vi) of Circular 64/98 though these are not relied upon in SCN. As per these circulars the Appellant should not have been given the impugned drawbac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not on the rest, or only a part of the duty chargeable had been paid or duty waived or there has been rebate or refund and is given as credit under any rules, the drawback admissible shall be reduced by taking into account the lesser duty or tax paid or refunded or credit obtained. Circular No.17/97 prescribed the various conditions and visualized different situations in which duty drawback could be given. It recognized that exporters who manufactured goods or get them manufactured were to follow a certain procedure. In the case of merchant exporters, the same circular provided as follows: (iv) In the case of merchant exporter who procures the export goods from the open market, the benefit of All Industry Rates of duty drawback shall be restricted to the Customs allocation only, if any. Export goods purchased from the market shell be treated as having availed the Modvat facility. 10. Circular No.64/98, dated 1.09.1998 superseded Circular No.17/97 and provided more elaborately the conditions to be followed by manufacturers, who exported goods, and paid or claimed credit in terms of the prescribed rules or statutory schemes. It provided a procedure in respect of manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not registered nor availing of any Cenvat facility for any garments manufactured by them. 13. It can be discerned from the above discussion, that merchant exporters who did not get the garments manufactured or stitched through a job workers, but who procured goods from the open market were treated differently and an entirely different set of procedures always existed by virtue of Circulars of 1997 and 1998. The rationale for this was that goods were sourced from diverse suppliers and the authorities were alive to difficulty in securing certificates about duty credit. All these changed in 2003 with the issuance of Circular No.8/2003. 14. Circular No.8/03 dated 17th February, 2003 noticed that a large number of trade representations had been made that exporters found difficulty to furnish certificates from Central Excise Authorities for every export consignment. The circular also noticed that a committee was set up for making certain recommendations. The Circular then provided as follows:- 3. After accepting the recommendations of the Committee, the Board has decided that henceforth the manufacturer-exporters who are not registered with Central Excise or such merch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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