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TMI Blog2013 (5) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; dated 1-8-2005, issued in the name of the appellant i.e. M/s. Kariwala Green Bags. The lower authority has rejected the claim of drawback with the observation that :- (i) M/s. Kariwala Green Bags and M/s. Kariwala Industries Ltd. are different entities; (ii) the procurement of raw materials by M/s. Kariwala Green Bags for production by M/s. Kariwala Industries Ltd. is violative of the provisions of Rule 22(2) and Rule 34 of the SEZ Rules, 2006; (iii) the exports showing M/s. Kariwala Industries Ltd. as an exporter and utilizing LOP of M/s. Kariwala Green Bags amounts to misdeclaration and is in violation of the provisions of Section 50(2) of the Customs Act, 1962; and (iv) the foreign exchange payment do not abide by the rules and regulations prescribed vide Rule 30(8) of the SEZ Rules 2006, r/w RBI Rules & Regulations and Section 75 of the Customs Act, 1962. 3. Being aggrieved by the said order-in-original, respondents filed appeal before Commissioner (Appeals) who set aside the order-in-original and allowed the appeal. 4. Being aggrieved by the impugned order-in-appeal, the applicant department has filed this revision application un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd manufacturing activities shall maintain separate records for trading and manufacturing activities. Hence SEZ Rule governs unit-wise with all their activities and thus also taking into consideration of Net Foreign Exchange Earnings (NFEE). If at all the M/s. Kariwala Green Bags and M/s. Kariwala Industries are not taken as different units of M/s. Kariwala Industries Ltd., they cannot suo motu transfer their goods from one unit to other and export thereof as per the SEZ Rule. 4.3 The exporter M/s. Kariwala Industries Ltd. did not possess a valid LOP on the dates of exports. As such the exports made by them cannot be treated as exports under SEZ Act & Rules. Therefore, they are not entitled to any export benefit for the said exports. Knowing this fully well, they had surreptitiously used the LOP of another Unit which is a complete breach of trust, misdeclaration and was done with an ulterior motive to hoodwink the authorities. The export showing M/s. Kariwala Industries Ltd. as an exporter and utilizing LOP of M/s. Kariwala Green Bags which is a different unit as discussed earlier amounts to misdeclaration in the Shipping Bills. 4.4 The most vital point is Rule 30(8) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground of revision application. They have mainly submitted that : 5.1 That a firm/company may have more than one unit registered as different assessee in the Central Excise/SEZ Rules subject to maintaining separate book of inventory and separate periodical return. However, it is not necessary that Bank Account should be separate but the transaction done on behalf of both the units should be shown transparently in the books of account. However, in the present case the respondent have four different units i.e. three units in SEZ and one in DTA as explained above for which they have maintained separate books of inventory i.e. of separate book of purchase and sale and taken separate registration like separate LOP from DC, FSEZ for three separate units in SEZ and Different Central Excise registration for DTA unit. However, the Bank account for the DTA unit and all three SEZ units are different for maintaining the separate transaction, as SEZ is operating in foreign currency and DTA is operating in INR. The respondent submits that as all four units are related to a single mother company, M/s. Kariwala Industries Ltd. one balance sheet has been filed before the Income Tax Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were procured and utilised towards manufacturing of the resultant export product which were exported against the enclosed IEC of their mother company M/s. Kariwala Industries Ltd. From the above finding it is clear that the aspect of separate units of respondent and M/s. Kariwala Industries Ltd. has been scrutinized by the Commissioner and was satisfied that M/s. Kariwala Industries Ltd. was nothing but mother company of respondent. 5.2 That the three different units situated in Falta, SEZ of M/s. Kariwala Industries Ltd. which also includes respondent, have been well maintaining their separate account of purchase, consumption, sale and their realizations as per the SEZ Rules, 2006 and till date no such problem occurred with the concerned DC, of FSEZ. However, this ground is baseless as till date no such record has been produced by the department or adjudicating authority while rejecting the claim of the respondent. 5.2.1 The respondent submits that it is evident from the letter of extension dated 15-12-2009 issued by the DC, FSEZ to the respondent that the respondent were working well within the ambit of SEZ Act, 2005 and SEZ Rules, 2006. 5.2.2 It also submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were made against the LOP of the respondent Unit-III of M/s. Kariwala Industries Ltd. and for the same reason the name of mother company and valid LOP of respondent is mentioned on the relevant Shipping Bills. 5.3.2 The respondent also submits that the procedure taken by the respondent to export the goods by mentioning the name of mother company as well as the LOP was repeatedly permitted by the Customs department at the time of export. Hence, at the time of sanctioning drawback claim it cannot be denied by very same department who has allowed exporting the respondent on the name of mother company. 5.3.3 The respondent also submits that in similar situation the respondent were earlier allowed the drawback claim under which the respondent has exported the goods by showing the name of their mother company and their LOP. 5.3.4 The respondent also submits that on plain reading of the above ground, the allegation/submission of the applicant Commissioner is not quite clear. In the present case M/s. Kariwala Industries Ltd. who is a mother company, is not claiming the Drawback claim. The export has been done in the name of mother company by the respondent by mentionin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finition. Hence, in view of the aforesaid definition, it is quite clear that procurement of the raw materials by the respondent should be termed as "Deemed Export" for the DTA unit for which the drawback is eligible in terms of Rule 30(8) of SEZ Rules, 2006. 5.4.3 It is also submitted that condition of payment in foreign currency in terms of Rule 30(8) of SEZ Rules, 2006 has been also liberalized by the Government w.e.f. 3-2-2009. 5.5 In this regard, the respondent submits that the Commissioner (Appeals) has not passed the Order as ex parte as it can be found from the verdict of the ld. Commissioner (Appeals) made on Para 5 of OIA under which it is clearly mentioned that the case was decided on the basis of grounds of appeal and facts on record, after repeated dates of hearings. However, the ld. Commissioner (Appeals) has made a speaking order by taking note of each and every allegation in the Order-in-Original of the adjudicating authority. Hence, when the Commissioner (Appeals) has given the judgment by justifying the reason of the same, it cannot be said that the impugned Order-in-Original is passed as ex parte decision. It will not be out of place to mention here th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for goods procured from DTA Unit, from the foreign currency account as required under Rule 30(8) of SEZ Rules, 2006. 9.1 The respondent has filed their counter reply to all submissions of the department. Government notes that the final exports are claimed to be made by mother company M/s. Kariwala Industries on the LOP of M/s. Kariwala Green Bags. No objection was raised at the time of exports on this point. Though, respondent has not categorically stated as to whether the procured materials were transferred to other unit in SEZ or the goods were manufactured by respondent M/s. Kariwala Green Bags himself. However Rule 30(15) of SEZ Rules, 2006 stipulates procedure for procurement of goods and services from another unit located in same SEZ. Since inter-unit transfer of material is permitted subject to compliance of laid down procedure, so such violation if any can be treated a procedural condonable lapse, which cannot be a reason to deny substantial benefit like drawback. But in this case respondent has not produced the relevant records for verification by Assistant Commissioner of Customs. Therefore, in the absence of valid documentary evidence regarding proper maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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