TMI Blog2013 (10) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... nal authority also observes that the applicant has availed Cenvat facility of capital goods and hence violated the Provision contained in Board’s Circular No. 103/2008-Cus. (N.T.), Government observes that condition of non-availment of Cenvat credit referred to in the context of said circular means non-availment of Cenvat credit on input or input services. The C.B.E. & C. vide Circular No. 42/2011-Cus., dated 22-9-2011, has clarified that the expression : “when Cenvat credit facility has not been availed”, means Cenvat facility on inputs and input services and is to be understood as such. Hence, observation of lower authority on this count also is not tenable. Government further notes that Commissioner (Appeals) in his subsequent Order-in-Appeal No. 38/BPL/13, dated 5-2-2013, in the case of M/s. Anant Raison MP, has allowed drawback claim in such case. Therefore, Government holds that drawback claims in these cases are admissible to the applicant. - Decided in favour of assessee. - F. No. 375/03-03A/DBK/ 2013-RA - Order Nos. 239-240/2013-Cus - Dated:- 23-10-2013 - Shri D.P. Singh, Joint Secretary Shri Sanjay Malhotra, Member, Corporate Advisory Board and S.K. Sandhu, Asstt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 28-5-2010 was issued to applicant wherein it is alleged that why the drawback claim of ₹ 2,87,763/- erroneously sanctioned to them vide Order-in-Original No. AC/DBK/CUS/09-10 should not be recovered along with interest under the provisions of Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. The main contention raised by the department in SCN is that applicant has availed CENVAT credit on capital goods and has claimed rebate of same, hence the duty drawback benefit is not available. The original authority confirmed the demand of already sanctioned drawback claim along with the interest vide impugned Order-in-Originals mentioned in Sr. No. (2) of above table. 3. Being aggrieved by the said both Orders-in-Original the applicant filed appeals before Commissioner (Appeals), who, vide common Order-in-Appeal dated 17-12-2012, upheld the impugned Orders-in-Original and rejected the appeals. 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 The main issue for consideration is that whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s other than cotton i.e. packing material, lubricants, coolants, consumables have been subjected to duty of Excise which is not in dispute and alleged by the department. Besides above, the input services such as inward transportation on purchase of cotton, packing material, consumables, shifting and loading of Cotton in production area have been subjected to service tax @ 10.30% for which CENVAT credit has also not been availed. Service Tax on inward transportation of raw material i.e. Cotton and other input services have been paid by us which is also not in dispute. 4.5 Reference is further drawn to para 2 of the (Board Circular No. 19/2005-Cus., dated 21-3-2005 in relation to Rule 3(1)(ii) of Customs, Central Excise Service Tax Drawback Rules, 1995. The last paragraph of said Circular provides as under :- It was categorically stated in the said Circular Board s (Circular No. 24/2001-Cus., dated 20-4-2001) that the first proviso to rule 3 of Drawback Rules, 1995 is meant for Ministry and that it essentially provides a guideline as to how the duty drawback rates are to be determined in certain situations and is not intended for the field formations to use this rule for arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y confirmed the demand of already sanctioned drawback relying upon provision of Rule 3(1)(ii) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (herein referred as DBK Rules) on the ground that the applicant manufactured/exported the product in question contained raw material on which no duty was paid. In the case mentioned at Sr. No. (2), the fresh drawback claim of the applicant was rejected on aforesaid ground as well as on ground that the applicant availed Cenvat credit on capital goods, which is in violation of para 13 of the Notification No. 103/2008-Cus. (N.T.), dated 29-8-2008. Commissioner (Appeals) rejected applicant s appeals. Now, the applicant has filed these revision applications on grounds mentioned in para (4) above, 8. Government observes that the original authority rejected drawback claim on the ground that the exported goods contain raw material on which no duty was paid and hence, they are not eligible of AIR drawback in term of provisions of Rule 3(1)(ii) of the Drawback Rules, 1995. The original authority also relied upon Tribunal judgment in case of M/s. Rubfilla International Ltd. v. CCE, Cochin - 2005 (190) E.L.T. 485, which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct at prior stages of manufacture. Further, input service and packing materials are also utilized and need to be factored while arriving at a rate of duty drawback. In view of above facts, it may not be correct to deny the AIR of the drawback to the exporters for the present. From harmonious perusal of above Circular/clarification, it is clear that AIR rate of DBK is available even where the inputs used in the export have suffered Nil rate of duty, because the drawback rate arrived at by taking into account also the duties suffered on export product at prior stage of manufacture. Further, taxes paid as input services and duty suffered on packing materials are to be factored in. As such, denials of AIR of drawback only by quoting Rule 3(1)(ii) of said Drawback Rules without considering clarification issued by the Board from time to time, is not correct and hence, is not tenable. 9. The department is also relying upon Tribunal s judgment in case of M/s. Rubfilla International Ltd. which was also confirmed by Hon ble Supreme Court. The applicant in their grounds of revision application has contended that fact of their case is different from fact of M/s. Rubfilla Internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The judgment of M/s. Rubfilla International Ltd. would one into play when the export product is manufactured out of inputs which have not at all suffered any duty. While in the instant case, apparently, the AIR on cotton yarn has been issued duly considering that the major raw material cotton did not all along attract duty and only other inputs or input services which attracted duty/tax were taken into account for computing incidence of drawback. Hence, the Rubfilla judgment is not squarely applicable in the instant case. Government agrees with finding of Commissioner (Appeals) and holds that in present case the ratio of said judgment cannot be applied since duty incident of input service is also factored after 13-7-2006. 9. Government observes that the original authority also observes that the applicant has availed Cenvat facility of capital goods and hence violated the Provision contained in Board s Circular No. 103/2008-Cus. (N.T.), Government observes that condition of non-availment of Cenvat credit referred to in the context of said circular means non-availment of Cenvat credit on input or input services. The C.B.E. C. vide Circular No. 42/2011-Cus., dated 22-9-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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