TMI Blog2013 (7) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... duty paid - assessee was claiming brand rate on duty paid on indigenous inputs which are specified in SION norms – Held that:- the claim was not admissible in view of provisions of Circular No. 39/2001-Cus. – assessee’s reliance upon relevant export-import Policy was not tenable on the ground that no provision in the said Policy categorically provides for exemption from conditions for eligibility of drawback in terms of circular No. 39/2001-Cus - brand rate of drawback is available for duty paid on indigenously procured inputs provided such inputs are not specified in SION - the inputs on which brand rate was being claimed are specified in SION, as such, rendered the assessee ineligible for brand rate of drawback in terms of Board’s Circular No. 27/2001-Cus. Brand rate of Duty paid under protest – the claim of duty paid under protest had been rejected - rejection of brand rate of duty paid under protest on inputs by input supplier - Government notes that the original authority had clearly held that in absence of non-mentioning of reason of payment of duty under protest in their Drawback claims and in absence of any certificate indicating that refund of duty had not been claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim has not been considered for allowing drawback. The original authority also informed by impugned letter that letter under reference has not considered the drawback claim on indigenous inputs specified in relevant SION, which were used in tractors exported under DEPB-cum-Drawback Shipping Bills, and DFRC-cum-Drawback Shipping Bill. The impugned letter also did not consider Rs. 9,12,026/- paid on inputs not imported under DFRC Scheme, Rs. 93,032/- paid on inputs not imported under DEPB Scheme and Rs. 11,504/- paid under protest. 3. Being aggrieved by the impugned orders the applicant filed appeals before Commissioner (Appeals), who rejected the same. 4. Being aggrieved by the impugned Orders-in-Appeal, the applicant has filed these revision applications under Section 129DD of Customs Act, 1962 before Central Government on the following grounds: 4.1 It is an undisputed fact that the duties, on IC engines, transmission assembly and sheet metal components and other inputs used exclusively in the manufacture of tractors, has been paid. It is also an undisputed fact that credit was not taken on such duty paid on the aforesaid goods, which are used in the manufacture of tractors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this notification to the parts of tractors is a conditional exemption. Therefore the bar provided under Section 5A(1A) is not applicable to the parts of the tractor. 4.6 The Commissioner (Appeals) should have appreciated that the conditions are inherent/inbuilt in the description of the excisable goods listed out against the Entry No. 296 of Notification No. 6/2002-Central Excise, dated 1-3-2002 as amended by Notification No. 23/2004-Central Excise, dated 9-7-2004, though the said condition has not been spelt out under column 5 of the table annexed to the said notifications. But, by non-application of mind, the Commissioner (Appeals), Mumbai, has held that there is no condition prescribed anywhere in any column of the said entries. He has further contended that the applicants have not pointed out the specific condition and have vaguely claimed that the exemption available to them is conditional. 4.7 It is a well settled legal position that the manufacturer has the option to avail or not to avail the exemption notification. In the case of fixing of brand rate, determination of brand rate is based on the fact of use of material or components or inputs or input services which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich Drawback of the duty paid on indigenous inputs specified in relevant SION used in tractors exported under DEPB-cum-Drawback Shipping Bills has been denied to them], is not applicable to goods exported by them in August 2005. The applicant submitted that since DEPB rate has not been notified in respect of the balance 31 inputs of the relevant SION, Drawback of the duty paid on the indigenous inputs used in the tractors exported by the applicant cannot be denied to them based on the Circular No. 39/2001-Cus., dated 6-7-2001. The main objective of the DEPB. Scheme, as introduced in the EXIM Policy 1997-2002, was to neutralize the incidence of basic customs duty and surcharge on the import content of the export product. This neutralization was proposed to be achieved by way of grant of duty credit against the export product and this duty credit was to be calculated as per the Standard Input-Output Norms (SION). The DEPB Scheme, as notified in 1997, had clarified that the exports made thereunder shall not be entitled for Drawback. But exporters of excisable goods, on which no excise duty was payable, who were not able to avail credit of the CVD paid in cash on imported inputs and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot under Circular No. 33/2000-Cus., dated 2-5-2000. Consequently, upholding the rejection of the claim for duty drawback on the inputs of tractors exported under DFRC-cum-Drawback shipping bills on the basis of the aforesaid erroneous conclusion is not legally sustainable. 4.13 The applicant is entitled to the drawback of the duty amounting to Rs. 1,33,283/- + Rs. 9,12,026/- paid on inputs used in the tractors exported in the month of August 05 under DFRC-cum-Drawback Shipping Bills. The amount of Rs. 20,45,199/-, excluded on account of indigenous inputs specified in relevant SION, which were used in tractors exported under DEPB-cum-Drawback Shipping Bills, includes claim for drawback of duty paid on indigenous inputs used in tractors exported under DEPB-cum-Drawback Shipping Bills. Therefore, in a worst case scenario, only an amount of Rs. 19,11,917/- attributable to indigenous inputs used in tractors exported in the month of August 05 under DEPB-cum-Drawback Shipping Bills could have been rejected on grounds of inclusion in the relevant SION. The applicant had substantiated their claim to the Brand Rate of Duty Drawback of the duty amounting to Rs. 9,12,026/- paid on inputs use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported under DFRC scheme, Rs. 93,032/- paid on inputs not imported under DEPB Scheme and Rs. 11,504/- paid under protest. The applicant preferred appeal against the impugned Order-in-Original before the Commissioner (Appeals), who rejected the same by upholding the impugned Order-in-Original. 8. The applicant has argued that Sr. No. 296 of the Notification No. 23/2004-C.E., dated 9-7-2004 which amended Notification No. 6/2002-C.E., dated 1-3-2002 exempts the parts of tractors, used captively in the manufacture of tractors and as such the entry is not absolute in nature and the exemption becomes conditional. The relevant entry of the Notification No. 6/2002-C.E., as amended by Notification No. 23/2004-C.E., dated 9-7-2004 reads as follows :- Notification No. 6/2006-C.E., dated 1-3-2006 relevant portion 92. Any Chapter Parts, used within the factory of production for manufacture of goods of heading 8701 Nil Notification No. 23/2004-C.E., dated 9-7-2004 which amended the Notification No. 6/2002 295. 87.01 All goods Nil 296. Any Chapter Parts, used within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted under DEPB Scheme used in export products and no Modvat (Cenvat) has been availed for such additional duty paid; and (b) Where excise duty is paid on indigenous inputs not specified in relevant SION but used in export product and no Modvat (Cenvat) has been availed for such excise duty paid. From perusal of above, it is evident that brand rate of drawback is available on excise duty paid on indigenous inputs only if such inputs are not specified in relevant SION. In the instant case, the applicant is claiming brand rate on duty paid on indigenous inputs which are specified in SION norms. As such, their claim is not admissible in view of provisions of Circular No. 39/2001-Cus. Applicant s reliance upon relevant export-import Policy is not tenable on the ground that no provision in the said Policy categorically provides for exemption from conditions for eligibility of drawback in terms of circular No. 39/2001-Cus. Moreover the said circular was not amended by any of the circulars cited by the applicant. 10. As regard to entitlement for brand rate of drawback for export made under DFRC Scheme, Government notes that such eligibility is governed by Board s Circular No. 27/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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