TMI Blog2013 (5) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... e original authority for said violations. Reimbursement of duty in lieu of drawback against supply of goods by DTA supplier to SEZ developers, shall be admissible even if payment is made in Indian rupees. This proviso relates to reimbursement of duty scheme where DTA unit supplies goods to SEZ developers only. As such respondent has wrongly relied upon this Notification which has no application to instant case. - Decided in favour of Revenue. - F. No. 380/6/DBK/12-RA - 142/2013-Cus - Dated:- 28-5-2013 - Shri D.P. Singh, Joint Secretary None, for the Assessee. Shri D.K. Singh and R.K. Singh, Advocates, for the Department. ORDER This revision application is filed by the applicant Commissioner of Customs (Airport Admn.), Kolkata against the Order-in-Appeal No. KOL/CUS/CKP/484/2011, dated 30-12-2011 passed by Commissioner of Customs (Appeals), Kolkata with respect to Order-in-Original No. 01/Adjn/2011-12, dated 9-8-2011 passed by Assistant Commissioner of Customs, Falta SEZ, South 24 Parganas, West Bengal. 2. Brief facts of the cases are that the respondents M/s. Kariwala Green Bags, Kolkata, a unit of Falta SEZ filed a drawback claim for ₹ 52,67,429 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on its seal; The seal that are affixed in the documents bears the seal of M/s. Kariwala Green Bags and that in the shipping bills are of Kariwala Industries, which are different. The seal that are affixed below the Bond-cum-Legal undertaking of M/s. Kariwala Green Bags clearly depicts the seal of M/s. Kariwala Green bags. Rule 22(iv)(a) of SEZ Rules states that the Bond-cum-Legal undertaking shall be affixed with the common seal of the company. A common seal distinguishes between two companies. In this case the seal is of M/s. Kariwala Green Bags not that of M/s. Kariwala Industries. 4.2 Rule 34 and Rule 22(ii) of the SEZ Rules, 2006 state that every unit and developer shall maintain proper accounts, financial year-wise, and such accounts which should clearly indicate in value terms the goods imported or procured from Domestic Tariff Area, consumption or utilization of goods, production of goods, including by-products, waste or scrap or remnants, disposal of goods manufactured or produced, by way of exports, sales or supplies in the domestic tariff area or transfer to Special Economic Zone or Export Oriented Unit or Electronic Hardware Technology Park or Software Tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Kariwala Green Bags, SEZ and, therefore, payment made to M/s. Kariwala Industries Ltd. (DTA) by debit to this a/c for the goods supplied by them to M/s. Kariwala Green Bags may not be considered as deemed export. Moreover, SBBJ has also informed to Reserve Bank of India that M/s. Kariwala Green Bags do not maintain any foreign currency account with them. The subject Order-in-Appeal is in contravention to the provisions and the observations of the Reserve Bank of India which is the final authority with regard to foreign exchange remittances and other related issues. 4.5 On the first date of hearing, the officers of FSEZ were deputed for Bye-election duties and as such were not in a position to attend the hearing before the Commissioner of Customs (Appeals). The same was duly communicated to the appellate authority. However, the communication regarding the subsequent date of hearing could not reach this office in time. No further opportunity was given to the department to place its views before the appellate authority and an ex parte order was passed. By denying the department an opportunity (The department was not given proper opportunity) to be heard before passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has different companies; however, they have different units under a single company named M/s. Kariwala Industries Ltd. and have its name engraven in legible character on its seal. As the respondent i.e. M/s. Kariwala Green Bags is a unit of M/s. Kariwala Industries Ltd. and in terms of SEZ law, M/s. Kariwala Green Bags is a registered unit, the seals are different but it does not lead that M/s. Kariwala Green Bags which is a unit of M/s. Kariwala Industries Ltd. registered under the Companies Act as separate firm from M/s. Kariwala Industries Ltd. 5.1.2 The respondent refers Rule 19(7) of SEZ Rules, 2006 under which it is provided that if an enterprise is operating both as a DTA unit as well as SEZ unit, it shall have two distinct identities with separate books of account, but it shall not be necessary for the SEZ unit to be a separate legal entity. From perusal of the above Rules, it is clear that under a single company more than one unit in DTA as well as SEZ can be operated. 5.1.3 That the Commissioner of Customs (Appeals), Kolkata, has clearly mentioned in their finding at Para 6 of impugned Order-in-Appeal that it clearly transpires that in FSEZ, M/s. Kariwala Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant Commissioner before the ld. Commissioner (Appeals) regarding non-maintaining of separate books of account for purchase, consumption, sale by the other units of the respondent s mother company during the whole of the proceedings, the finding on this account could not be warranted from the ld. Commissioner (Appeals). 5.3 As the IEC is in the name of M/s. Kariwala Industries Ltd. i.e. the mother company and all the other units made a part of the same, using the name of mother company in the Shipping Bill is not barred by law. However, mentioning the LOP number of respondent leads that the goods were exported under the obligation of export to be fulfilled by respondent i.e. M/s. Kariwala Green Bags. It is not a case where the export obligation is accounted in the name of some other unit of M/s. Kariwala Industries Ltd. 5.3.1 Here the applicant Commissioner misinterpreting the facts and trying to prove that the first unit i.e. export has been made by M/s. Kariwala Industries Ltd. (Unit-I of M/s. Kariwala Industries Ltd.) whose LOP is expired at the relevant time of export as they found name as M/s. Kariwala Industries Ltd. on the face of Shipping Bills. The respondent submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curement of the goods from DTA by the respondent as after filing of annual return (APR - Annual Performance Report) for relevant year no such clarification has been sought by the DC, FSEZ. 5.4.1 It is also fact on record that till date no such action under FEMA or other Act has been taken against the respondent towards such transaction by the RBI or DC, FSEZ, which proves that the payment made by the account maintained by the mother company i.e. M/s. Kariwala Industries Ltd. on behalf of respondent is well covered within the ambit of RBI guidelines, deemed export and termed as payment by respondent to the DTA unit in terms of Rule 30(8) of the SEZ Rules, 2006. The DC, FSEZ has accounted the return filed by the respondents and considered the said transaction as deemed export as they have accepted that transactions made by mother company on behalf of respondent to the DTA unit. Therefore it cannot be denied on the basis of opinion conferred by some irrelevant authorities like AGM, RBI. 5.4.2 That the term Deemed Export is defined in Para 8.1 of Chapter 8 of Foreign Trade Policy under which it is mentioned that Deemed Export refers to those transactions in which goods suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 5-3-2013 reiterated the submissions made in Department s revision application. 7. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. 8. On perusal of records, Government notes that in this case M/s. Kariwala Green Bags, a unit of Falta SEZ, filed drawback claim of ₹ 52,67,429/- in respect of the goods supplied to them by M/s. Kariwala Industries Ltd. a DTA Unit during the period April, 2008 to March, 2009. Original authority had rejected the drawback claim whereas Commissioner (Appeals) has allowed the said claim. Now applicant department has filed this revision application on the grounds stated in foregoing paras. 9. Government notes that department has mainly contended that each company/SEZ Unit is a separate and distinct unit and therefore, M/s. Kariwala Industries Ltd. and M/s. Kariwala Green Bags cannot be treated as one and the same unit, that respondent has not maintained proper account showing accountal of goods procured from DTA unit and violated Rules 34 and 22(ii) of SEZ Rules, 2006, that the exports made by M/s. Kariwala Industries Ltd. without any valid LOP cannot be trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mainly arguing that payment made in foreign currency from current account satisfies the requirement of Rule 30(8). In this regard, Government observes that the said Rule clearly stipulates that payment for supplies from DTA unit has to be made from foreign currency account of the SEZ unit. In this case, payment is made from current deposit account No. 51044001797 which is not a foreign currency account, as also clarified by AGM, RBI Kolkata, Foreign Exchange Department vide his letter No. Kol.FED. 312/20.65.001/11-12, dated 25-7-2011. As such the said mandatory condition of Rule 30(8) is not complied with this case. Commissioner (Appeals) has erred in ignoring the applicability of Rule 30(8) in this case. Government, therefore finds that this plea of the applicant is legally tenable. As such Government hold that impugned drawback claim were rightly rejected by the original authority for above said violations. 9.4 Respondent has relied upon Notification No. dated 3-2-2009 issued by Ministry of Commerce Industry, Department of Commerce and claimed that drawback will be admissible even if payment is made in rupees. On perusal of said notification, it is observed that as per Sr. N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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