TMI Blog2013 (8) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... mental authorities – and INDIAN ALUMINIUM COMPANY LTD. Versus THANE MUNICIPAL [1991 (9) TMI 162 - SUPREME COURT OF INDIA] - when provisions were stipulated for doing a particular act in a specific manner then it would mean that any deviation therefrom was not permitted at all and it should be performed in that manner itself as per Rules. Purpose of Rule 8(2) of Drawback Rules - Rule 8(2) provides the formula to ascertain value addition as provided under Board Circular No. 14/2003-Cus - the value as per Bill of Entry and Shipping Bill were to be necessarily taken into consideration - Any subsequent negotiations or re-settlement of prices to be paid specifically when the assesse had paid the duties at the time of imports through DFCE licence cannot override the statutory provisions - The orders-in-appeal were therefore upheld for being perfectly legal and proper– Revision application Rejected – Decided against assesse. - 371/10/DBK/11-RA; 371/06/DBK/11-RA and 371/54/DBK/11-RA - 342-344/2012-Cus - Dated:- 16-8-2012 - Shri D.P. Singh, J. Shri A.B. Nawal, Consultant, for the Appellant. ORDER These revision applications are filed by the applicants against the orders-in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if the export value of each of such goods or class of goods in the shipping bill is less than the value of imported materials used in the manufacture of such goods. Since in respect of above application, the value of goods exported was less than the value of raw materials imported, SCN dated 19-7-2010 was issued to the applicant the claim under Rule 8(2) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. After following the due process of law, the adjudicating authority rejected the brand rate fixation application. 2.2 RA No. 371/06/DBK/11-Cus. M/s. Suraj Impex (I) Pvt. Ltd., Nashik The applicant a merchant exporter imported raw material under DFCE scheme vide Not. No. 53/2003-Cus., dated 1-4-2003 and got their finished goods i.e. P.P. Woven Sacks/Fabrics, manufactured from M/s. Marvel Industries, MIDC, Malegaon, Sinnar (hereinafter referred to as M/s. Marvel ). The applicant filed three applications bearing Nos. SIPL/DBK/08-09/016 dated 5-2-2009 and SIPL/DBK/08-09/015 dated 19-1-2009 SIPL/DBK/08-09/014 dated 19-1-2009 for fixation of drawback (brand rate) under Rule 6(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or class of goods in the shipping bill is less than the value of imported materials used in the manufacture of such goods. Since in respect of above application, the value of goods exported was less than the value of raw materials imported, SCN dated 12-7-2010 was issued to the applicant and after following due process of law, impugned order-in-original was passed rejecting the above claim under Rule 8(2) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 for a negative value addition as detailed therein. The plea of the applicant that they had also imported plates of value Rs. 2,41,632/- which were retained by them and its value was reimbursed subsequently should be excluded from CIF value of imports was not acceded to. 3. Being aggrieved by the said orders-in-original, the applicants filed appeals before Commissioner (Appeals) who rejected the appeals of the applicants and upheld the impugned orders-in-original. 4. On being aggrieved by the impugned orders-in-appeal, the applicants have preferred these revision applications before Central Government under Section 129DO of Customs Act, 1962 mainly on the following common grounds : 4.1 That Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 4.5 Since the said material was supposed to be used for the export consignment which was made under the provisional drawback claim under Brand Rate Fixation under Rule 7 of Customs, Central Excise Duties Service Tax Drawback Rules, 1995 and therefore, applicant have right to claim the duty whatever paid on whatever value once goods has been exported subject to achievement of positive value addition through Brand Rate Fixation and Duty Drawback Claim. 4.6 Since there is no drawback rate fixed for the product of the applicant, they have to apply for fixation of drawback rate within period of 60 days from the date of export. Hence applicant instead of challenging the assessment proceeding opt for claiming drawback. 4.7 That for challenging assessment of Bill of Entry they have to file an appeal with proper authority and this takes long time therefore applicant was in apprehension that limitation period for filing an application will be elapsed. Further as per proviso to Rule 6(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback (Amendment) Rules, 2006 limitation period can be condoned only for further 30 days on sufficient cause being shown and if appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate dated 1-10-2009 from them. The revised price is the sole consideration/payment made to the supplier and there is no other payment outstanding against the supply made by them. (iii) Due to recession and economic slow down, the prices of raw material all over the world crashed down substantially and hence the export prices have also come down accordingly and in view of this the value addition comes negative if the prices of original import are considered. However, if the revised prices of the same imported inputs are considered which are paid through banking channel, which is the sole consideration paid to the overseas supplier, the value addition works out to positive. The applicant relied upon the Bill of Entry of the same suppliers i.e. M/s. Basell International Trading FZE importers i.e. M/s. KN Resources Pvt. Ltd. and M/s. Suraj Impex (I) Pvt. Ltd. For the same inputs i.e. MOPLEN HP 456 which are assessed before the economic slow down started all over the world and after the economic slow down. 4.11 That Rule 8(2) of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 provides that for considering the export value the value declared in the Bill of Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cost, Insurance and Freight means that the seller delivers when the goods pass the ship s rail in the port of shipment. Whereas assessable value is required to be determined in terms of Section 14 of Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and both the terms are completely different and cannot be interchanged. Additional Commissioner wrongly determined the value addition, taking the assessable value and not the CIF value of imports. 4.15 That drawback has been defined in Rule 2(a) as drawback in relation to any goods manufactured in India and exported, means the rebate of duty or tax, as the case may be, chargeable on any imported materials or excisable materials used or taxable services used as input services in manufacture of goods. In the present case, there is no dispute that the goods exported are manufactured in India out of imported material and the value of imported material paid by the applicant needs to be considered for calculation of value addition. 5. Personal hearing was scheduled in these cases on 20-4-2012, 31-5-2012 and 29-6-2012. Shri A.B. Nawal, Consultant appeared for personal hearing on 29-6-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared with the re-negotiated price of imported materials and therefore requested to consider the revised brand fixation applications for fixation of drawback brand rate under Rule 6 ibid. 9. The application for fixation of brand rate was rejected on the ground that the basic condition of Rule 8(2) of DBK Rules is not satisfied. For easy reference said Rule 8 is reproduced below :- Rule 8. Cases where no amount or rate of drawback is to be deter- mined. - (1) No amount or rate of drawback shall be determined in respect of any goods under rule 3, rule 6 or, as the case may be, rule 7, the amount or rate of drawback of which would be less than [one per cent] of the FOB value thereof, except where the amount of drawback per shipment exceeds five hundred rupees. Provided that this sub-rule shall not apply in the case of - (a) drawback on exports made in discharge of export obligation against an Advance Licence issued under the Export and Import Policy notified by the Central Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or (2) No amount or rate of drawback shall be determined in respect of any goods or class of goods unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back brand rate fixation applications submitted subsequently cannot be treated as valid application submitted in terms of Rule 6 of Drawback Rules, 1995 as the same is either not submitted within the stipulated statutory time-limit in addition to deficiencies as pointed above. As per the applications filed initially, there is a negative value addition in exports to the extent as detailed in respective orders. So, no brand rate of drawback can be determined in these cases. 11. Applicants have relied upon the judgment in the case of Oracle Infotech (P) Ltd. v. CCE, New Delhi - 2003 (151) E.L.T. 656 (Tri.-Del.). Government notes that there was mis-declaration of value and description of goods imported for re-export. In the instant case neither the CIF value declared on the Bill of Entry as assessed by Customs, was disputed nor the materials imported were imported for re-export. As such the ratio of said judgment cannot be applied to this case. Applicant has also referred to the provision of Rule 16(2) of Drawback Rules, 1995. But in the instant cases, the issue involved is of fixation of brand rate of drawback under Rule 6 ibid and there is no applicability of Rule 16(2) in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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