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TMI Blog2013 (10) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... by them without payment of duty under Rule 19(2) of the Central Excise Rules, 2002. The use of duty free Hexane was admitted by the Works Manager of the manufacturer in his statement. As per relevant Drawback notification, the drawback claims were not admissible if the facility of Rule 19(2) of Central Excise Rules, 2002 was availed while manufacturing the goods. Accordingly, the Joint Director, DGCEI, Indore issued a show cause notice on 6-10-2010 which was subsequently adjudicated by adjudicating authority vide the impugned order-in-original wherein he ordered for recovery of drawback amount to the tune of Rs. 94052/- from M/s. Pradeep Overseas and imposed penalty on the respondent including the respondents M/s. Rama Phosphate Ltd. A penalty of Rs. 1,50,000/- was imposed on respondents M/s. Rama Phosphate Ltd. 3. Being aggrieved by the said order-in-original the party filed appeal before Commissioner (Appeals), who set aside the penalty imposed on respondent and allowed the appeal. 4. Being aggrieved by the impugned order-in-appeal, the applicant department has filed this revision application, under Section 129DD of Customs Act, 1962 before Central Government on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty, hence, as per the above said provisions the respondent No. 1 was not eligible for drawback (Excise or Customs components). However, the appellate authority has overlooked the above provisions while deciding the matter in favour of the respondents. 4.4 Also, the appellate authority while passing the appellate order has failed to consider the order of the Revision Authority in the case of Sterling Agro reported in 2011 (269) E.L.T. 113 (G.O.I.) wherein at Para 15 the Revision Authority has categorically held as under :- "15. In view of the above discussion and findings, government, finds that the applicant by way of procuring duty free inputs under Rule 19(2) of Central Excise Rules, 2002 has contravened the clause (ii) of the second proviso to Rule 3(1) of the Central Excise Drawback Rules, 1995 [also Condition 7(f) of Notification No. 68/2007-Cus. (N.T.) and Condition No. 8(f) of Notification No. 103/200B-Cus. (N.T.)] and therefore no drawback is admissible in this case. As such, Government finds no infirmity in the impugned orders and upholds the same." The above decision of the Revision Authority is squarely applicable from the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served/held that drawback (excise or customs portion) is not admissible if the duty free raw materials/inputs have been used in the manufacture of export goods. (v) All the respondents are liable for penalty as per the findings of the adjudicating authority. 5. A show cause notice was issued to the respondent under Section 129DD of Customs Act, 1962 to file their counter reply. The respondent vide letter dated 21-6-2013, contended that there is no evidence as per show cause notice about their connivance with exporter, that there is no change for goods being liable to confiscation and therefore they are not liable to penal action. 6. Personal hearing scheduled in this case on 30-9-2013 was attended by Shri Ashutosh Uppadhaya, Advocate on behalf of the applicant and reiterated the grounds of 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 observes that in the instant case M/s. Pradip Overseas, Ahmedabad has exported Soya De Oiled cake (DOC) from Bedi port Jamnagar as a merchant exporter under dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of export obligations in terms of Notification No. 31/97-Customs, dated the 1st April, 1997, or against Duty Free Replenishment Certificate Licence issued in terms of Notification No. 48/2000-Customs, dated the 25th April, 2000, or against Duty Free Replenishment Certificate Licence issued in terms of Notification No. 46/2002-Customs, dated the 22nd April, 2002, or against Duty Free Replenishment Certificate Licence issued in terms of Notification No. 90/2004-Customs, dated the 10th September, 2004, drawback at the rate equivalent to Central Excise allocation of rate of drawback specified in the said Schedule shall be admissible subject to the conditions specified therein; (c) manufactured or exported by a unit licensed as hundred per cent. Export Oriented Unit in terms of the provisions of the relevant Export and Import Policy and the Foreign Trade Policy; (d) manufactured or exported by any of the units situated in free trade zones or export processing zones or special economic zones; (e) manufactured or exported by availing the rebate of duty paid on materials used in the manufacture or processing of such commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if the rebate of excise duty paid on raw materials under Rule 18 or if such raw materials were procured with payments of duty under Rule 19(2). This facility was not available in earlier notification issued prior to Notfin. No. 84/2010-Cus. (N.T.), dated 17-9-2010. This notification is effective from 20-9-2010. So, it cannot be made applicable to export made prior to 20-9-2010. Government therefore holds that Commissioner (Appeals) has erred in making the said notification and circular applicable to export made prior to 20-9-2010. As such, the duty drawback benefit is not admissible in the instant case. Original authority had rightly ordered for recovery of said duty drawback amount along with interest. 11. As regard pleadings of the department for imposition of penalty, Government notes that the respondent M/s. Rama Phosphate Ltd. is a manufacture who sold the goods to merchant exporter M/s. Pradeep Overseas Ltd. The merchant exporter has not declared the fact of procurement of raw materials duty free under Rule 19(2) by the manufacturer, in the relevant shipping bills. Manufacturer has not made any such misdeclaration in any document. The allegation of his connivance with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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