TMI Blog2013 (8) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... – availment of Cenvat credit facility by exporter manufacturer is not denied by exporter and therefore the charge of mis-declaration of statement on the part of all noticees in relation to claim of drawback with an intention to avail drawback at higher rate stands proved. Commissioner (Appeals) has erred in setting aside the redemption fine and penalties - the redemption fine and penalties imposed by adjudicating authority appears harsh and their reduction is warranted – order modified. - F. Nos. 371/77-79/DBK/2011-RA & 380/01-03/DBK/2012-RA - 217-222/2012-Cus - Dated:- 8-5-2012 - Shri D.P. Singh, J. REPRESENTED BY : Shri H.D. Dave, Advocate, for the Assessee. Shri Krishna Kumar C. Kundaliya, Superintendent, for the Department. [Order]. These revision applications are filed by M/s. Texcellence Overseas, Ahmedabad and Commissioner of Customs (Prev.), Jamnagar against the same Order-in-Appeal Nos. 106-108/Commr/A/JMN/2011, dated 22-9-2011 passed by Commissioner of Customs (Appeals) Jamnagar as detailed below :- S. No. RA No. Applicant RA filed against O-I-A No./ Date (1) (2) (3) (4) 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted vide shipping bills for which the drawback claimed (b) penal action u/s 114AA on the appellant (c) penal action u/s 114(iii) on the exporters and (d) rejection of the duty drawback claim. 2.2 After due process of law, the matter was adjudicated vide the impugned order-in-original wherein based on the findings, the following order was passed by the adjudicating authority : (i) since goods are already exported and are not available for confiscation, imposed redemption fine of Rs. 4,00,000/- upon appellant-01. (ii) rejected the duty drawback claims filed by the appellants in respect of S/Bill No. F-4711/07-08 dated 30-7-2007, No. F-4205/07-08 dated 16-7-2007 and No. F-5840/07-08 dated 28-8-2007. (iii) imposed a penalty of Rs. 4,00,000/- under Section 114AA of the Customs Act, 1962 upon appellant-01 for contravening the provisions of the Customs Act, 1962. (iv) imposed a penalty of Rs. 2,60,000/- under Section 114(iii) of the Customs Act, 1962 upon appellant-01 for contravening the provisions of the Customs Act, 1962. (v) imposed penalty of Rs. 50,000/- upon Shri Gyansingh P. Sisodiya, appellant-02 Authorized Signatory of M/s. Texcellence Overseas under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which CENVAT was availed, and reversed subsequent to the export of the impugned goods, has not been made clear by the respondent, the Commissioner (Appeals) has held that the respondent shall be eligible only for Customs portion of the drawback because any subsequent reversal of CENVAT credit shall not make the respondent eligible for higher rate of drawback. 3.2 Accordingly, as forgery has not been conclusively established, and there is no proof of misdeclaration of export goods or material facts, and that since the respondent is eligible for lower rate of drawback (customs portion) as discussed above, the Commissioner (Appeals) has held that the impugned order holding the impugned goods as liable for confiscation is not correct. Thus, since the subject goods were not available for confiscation, the order of confiscation is also held as erroneous as per settled law. Finally, consequent to the above, imposition of penalties on the respondents 01 to 03 have been set aside. 4. Being aggrieved by the impugned orders-in-appeal, both the applicants have filed these Revision Applications under Section 129DD of Customs Act, 1962 before Central Government on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence has been totally, by-passed by the adjudicating authority and only on whimsical observation, dismissed the genuine claim of the appellant. 4.1.4 The appellant further submits that the adjudicating authority did not appreciate the legal principles and law set down by the Hon ble Tribunals and High Courts and the Hon ble Apex Court. It is further submitted that if we assume the case of the department that the appellant has earlier availed the facility of the CENVAT credit, the same has also been admitted by Mr. Gyansingh Sisodiya in this statement, but it is also a fact of the record that the said credit has never been utilized by the appellant, and in fact, the said credit was reversed by the appellant before its utilization and/or removal of goods. It is settled law that reversal prior to removal of goods is also as good as non-availment of credit. The appellant further submits that the adjudicating authority did not appreciate the said legal position of this issue. It is submitted that the Board has issued a Circular No. 858/16/2007-CX., dated 8-11-2007, which is based on the judgment of the Hon ble Apex Court, in the matter of CCE, Mumbai-I v. M/s. Bombay Dyeing Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Texcellence Overseas, Ahmedabad (respondents-01 to 03 respectively) is not legal and proper as Commissioner (Appeals) has not considered the fact that a detailed enquiry was conducted, records evidencing that both the certificates were forged by the exporter-respondents deliberately to usurp excess export benefits but held that it was only on the basis of presumptions that the adjudicating authority has concluded the findings. Since, the order-in-appeal is passed on the basis of incorrect appreciation of facts, the same suffers from factual infirmity and on the basis of this limited aspect the instant order-in-appeal deserves to be quashed and set aside in limine. 4.2.2 The Commissioner (Appeals) has erred in holding that except the statement that the allegedly a forged certificate F.No. AR-II/Texcellence Overseas Export File/07-08, dated 4-3-2008 was produced by the appellant, there is nothing on record to substantiate or prove that it was actually forged, and that such alleged forgery had material impact on drawback admissibility. The adjudicating authority has, at paragraph 32 of the impugned order explicitly discussed that the Superintendent, C.Cx., AR-II. Division-II, Ahm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if they were sure that the Cenvat credit was not availed then they would be eligible, as such. For this, reliance is placed on the order of Division Bench of the Hon ble High Court of Punjab Haryana in the case of Golden Tools International v. Joint DGFT, Ludhiana [2006 (199) E.L.T. 213 (P H)] after referring to the judgments of the Hon ble Supreme Court in S.P. Chengalvaraya Naidu v. Jagannath, AIR 1994 SC 853 and Commissioner of Customs v. Essar Oil Ltd. [2004 (172) E.L.T. 433 (S.C.) = (2004) 11 SCC 364]. 4.2.5 The Commissioner (Appeals) have admitted that the respondents actually availed the credit and claimed the duty drawback at higher rate, later on reversed the CENVAT credit to substantiate their claim of drawback at higher rate. This clearly establishes that the respondents had submitted the forged certificate solely for the purpose of claiming of drawback at higher rate which otherwise, knowing very well that the same was not admissible. 4.2.6 The Commissioner (Appeals) has erred in holding that the forgery has not been conclusively established , the adjudicating authority has deliberated this issue in detail i.e. looking to the sequence of events, it is explici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of Sravani Impex P. Ltd. v. Addl. Director General, DRI, Chennai [2010 (252) E.L.T. 19 (A.P.)] wherein it has been held that : The goods entered for exportation, which do not correspond in respect of value, or any material particulars with the entry made under the Act, are liable for confiscation. For a false entry made in the shipping bill. Section 113(i) of the Customs Act, read with Section 2(16) thereof, empowers Customs Officers to confiscate the goods . There is no provision in the Customs Act to suggest that this accrued liability is wiped out or is extinguished with the exportation of the goods. It may be that, after the goods are exported, the liability for confiscation may not be enforceable by physical confiscation of the goods. Personal penalty under Section 114 is attracted as soon as the goods incur liability to confiscation under Section 113..... Thus, the Commissioner (Appeals) has erred in holding that if the goods are not available for confiscation, the order of confiscation is erroneous. 4.2.8 The Commissioner (Appeals) has erred in setting aside the penalties, as imposed on respondent-01 to 03 under Sections 114(iii) and 114AA of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Government notes that point regarding admissibility of drawback claim at higher rate when duty free materials and fabrics procured under exemption Notification No. 30/2004-C.E., dated 9-7-2004 and Cenvat credit availed on other inputs capital goods and also service tax paid on input services was subsequently reversed is discussed by Commissioner (Appeals) in detail and his findings are as under :- 7. For clarity, it will be useful to go through the relevant conditions of Notification No. 81/2006-Custom (N.T.), dated 13-7-2006 and 68/2007-Customs (N.T.), dated 16-7-2007 determining the All Industry Rates for Drawback at the material period 2007-08 which read as under : (5) The figures shown under the drawback rate and the drawback cap appearing below the column Drawback when Cenvat facility has not been availed refer to the total drawback (Customs, Central Excise and Service Tax component put together) allowable and those appearing under the column Drawback when Cenvat facility has been availed refer to the drawback allowable under the Customs component. The difference between the two columns refers to the Central Excise and Service Tax component of drawback .. (12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lateral evidence that the benefits of CENVAT were actually, not availed. I have found, in the present case, that there is no dispute that manufacturer M/s. Texcellence Overseas, Plot No. 1704-05, Phase III, GIDC, Vatva, Ahmedabad, as a unit, was working under the CENVAT Scheme, and they did have the CENVAT credit of specified duties paid on inputs, input services and capital goods but all were reversed on 1-9-2007 as clarified by the jurisdictional Range Superintendent. However, so far export goods in question here is concerned, it is also proved beyond doubt that these goods were manufactured out of exempted fabrics procured under exemption Notification No. 30/2004-C.E., dated 9-7-2004, and thus they should be given drawback at the higher of two rates, and that complete denial of drawback is wrong. It is pertinent to mention that the drawback at higher rate is available, as mentioned in condition 12 of the notification, ibid, if no Cenvat facility has been availed for any of the inputs or input services used in the manufacture of the export product . There is no restriction of a unit functioning under the CENVAT Scheme. However, the condition refers to non-availment of CENVAT fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pliance of procedures and the rates admissible for drawback are determined accordingly. Further the documents, including Central Excise invoices and applications for removal (called ARE-1, ARE-2 etc.) are presented to Customs for assessment of the shipping bills and the same were assessed without reversal of credit when the goods were cleared for export from the factory/appointed place of removal for export. Having done so, and without seeking revision of assessment, merely by reversal of credit suo motu or otherwise at a subsequent date the exporter cannot claim at this point of time to have complied the requirements of Notifications and drawback rules to obtain higher drawback. For this I am relying upon the decision of Hon ble CESTAT in the case of M/s. Go Go International Pvt. Ltd. v. CCE, Nhava Sheva - 2010 (255) E.L.T. 81 (Tri.-Mum.) wherein it is held that reversal of CENVAT credit does not give the cover of availment of duty drawback to the appellant. 10. Government notes that fact of availing Cenvat credit of some inputs and input services used in the manufacture of export goods, is not denied by the exporter. The reversal of said Cenvat credit on 1-9-2007 whereas goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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