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Manawat Plastics Pvt. Ltd. Versus The Customs, Excise & Service Tax Appellate Tribunal, The Commissioner Customs, Central Excise & Service Tax

2016 (1) TMI 1052 - BOMBAY HIGH COURT

Conversion of Shipping Bill under DEEC Scheme to Drawback Scheme to avail export benefit - The CESTAT in the impugned order mentions that the Commissioner denied the conversion as CBEC Circular No. 4 of 2004 dated 16.01.2004 permitted such conversion only when benefit under Duty Exemption Entitlement Certificate Scheme (DEEC Scheme) is denied by DGFT/ Ministry of Commerce or Customs Authorities. - Held that:- May be, the Appellant had two advance licenses which must be putting normally under .....

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ck in all three ARE1 was restricted to the excise portion of finished product only, then said proportionate drawback or rebate could have been received back in cash on same lines as per rebate cheque for ₹ 2,32,848/dated 27.8.2002. It may not have been necessary to seek any advance license against it. No rebate is perhaps possible for imported raw material used to manufacture exported finished products. All these facts could have been verified from the terms of the documents had the appell .....

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ustoms Appeal No. 1 of 2014 - Dated:- 5-1-2016 - B. P. Dharmadhikari And P. N. Deshmukh, JJ. For the Appellant : Shri Varun Sinha with Shri Nitin Rode, Advocates For the Respondent : Shri A. Deshpande, Advocate JUDGMENT ( Per B. P. Dharmadhikari, J. ) The appellant - assessee has filed this appeal under Section 130 of the Customs Act, 1962, assailing the order dated 12.05.2014 passed by Respondent No. 1 - The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) and seeking conversion of .....

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goods were examined, their value was verified and the quantity was taken into consideration while allowing clearance. In para 7, it has taken note of the Circular dated 16.01.2004 (supra) and found that the benefit under DEEC Scheme was not denied to the appellant. Therefore, denial by the Commissioner has been upheld. Thus, only limited issue argued before this Court by the appellant is whether such denial is really necessary. 2. We have heard Shri Sinha with Shri Rode, learned counsel for the .....

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ng good health. We, therefore, granted him leave to place on record his rebuttal to reply arguments in writing and closed the appeal for orders. Those written reply arguments have been tendered on 16.11.2015. However, the matter appeared on 17.11.2015, before the Division Bench comprising of B.P. Dharmadhikari and V.M. Deshpande, JJ. This inadvertent listing was pointed out by the parties and accordingly on 17.11.2015, the concerned Bench took note of the fact that the matter was already closed .....

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above export products for Import of Duty Free raw material. The goods were exported from factory premises of their supporting manufacturer under DEEC Scheme. On 19.04.2004, the assessee requested to consider their request or to issue an appealable order. Consequently, a show cause notice dated 24.05.2004 asking them as to why their request dated 20.08.2003 should not be rejected. This show cause notice was adjudicated by the then Commissioner on 22.07.2004. 4. This Commissioner has found that si .....

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er was sent back to the Tribunal for de novo consideration. The Tribunal, in turn, on 08.07.2010, remanded the matter to the Adjudicating Authority for fresh decision. The order after fresh decision has been passed on 10.02.2011. After giving due opportunity to the assessee and after personal hearing, the adjudicating authority i.e. the Commissioner found that it had to decide whether the application of noticee for conversion of DEEC Shipping Bill to Drawback Shipping Bill was correct and proper .....

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Licenses and it was not their case that the department prevented it from availing the benefit of DEEC Scheme. It further found that the conversion was not claimed within one month and the request was made almost after one year. Request for reconversion was, therefore, held to be by way of after thought. In para 13.3, it has taken note of the fact that the circular speaks about permitting conversion of Free Shipping Bills into Drawback Shipping Bills and the assessee never filed Free Shipping Bi .....

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arlier circulars issued by the Board. In view of these findings, it rejected the request for conversion. 6. The impugned order passed by the CESTAT on 12.05.2014 is already briefly mentioned by us in opening paragraph, supra. It is in this background that we have to consider the contentions of the respective counsel. 7. Shri Sinha with Shri Rode, learned counsel for the appellant pointed out that Rule 12(i)(a)(2) has come into force on 13.07.2006 while here export in relation to which advance li .....

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amp; Central Excise Duties Drawback Rules, 1995. The documents also reveal that drawback on customs portion only was claimed. The certificate expressly mentions that exported goods were not manufactured by availing facility under Notification Nos. 41 of 2001 and 43 of 2001 of Central Excise issued under Rules 89 and 90 of Central Excise Rules, 2001. The request for conversion also pointed out that drawback was in relation to custom portion only and it also revealed weight of exported products al .....

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circular dated 16.01.2004, is unsustainable. 9. Shri Mirza, learned counsel appearing for the department points out that rebate claimed was sanctioned by the Commissioner on 27.08.2002 because of declaration contained in declaration for removal of excisable goods in Form No. ARE1 on 05.08.2012. Rule 12(a)(1)(ii) requires a statement that no rebate has been claimed and Rule 12(ii) also requires that there should not be separate claim for rebate. In this situation, when the appellants obtained tw .....

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e, rebate has been sanctioned on goods which were cleared. He, therefore, states that the rebate was allowed on finished goods and imported raw material was received by the appellants duty free. In this situation, according to him, no case is made out and reliefs as claimed cannot be granted. 10. The questions of law sought to be raised by the appellant in this appeal under Section 130 of the Customs Act, 1962, are as under : (I) Whether the Customs, Excise & Service Tax Appellate Tribunal w .....

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Learned Appellate Tribunal as well as the Commissioner was justified in not considering claim of the Appellant's in the light of Rule 12(1) (a) of the Customs and Central Excise Duty Drawback Rules, 1995, independently of the Circulars relied upon by the department ? (IV) Whether the claim of Appellant's is covered under Rule 12(1)(a) of the Customs and Central Excise Duty Drawback Rules, 1995, for conversion of the DEEC Shipping Bill into Drawback Shipping Bills based on the documentary .....

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pointing it out, the appellants seek benefit of circular dated 12.05.2003. Thus, on one hand they wish to avoid retrospective application of circular dated 16.01.2004 while on the other hand seek application of circular dated 12.05.2003 from an earlier date. 12. The provisions which regulate the conversion are contained in Rule 12. As per said rule, the exporter has to declare on his Shipping Bill or Bill of Export, description, quantity and such other particulars, as are necessary for deciding .....

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this provision has come into force on 13.07.2006 and was not in force in 2002. However, obvious intention is to avoid same benefit being availed again. To us, it appears to be clarificatory in nature & therefore, regulating the case of Appellant also. 13. The advance license is always issued to allow duty free import of inputs which are physically incorporated in export product. Thus, advance license is to be used in future and is never issued for imports already made or exports effected. I .....

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inding, the objection of department against conversion was overruled. The second objection about non production of original Advance License was also overruled in the absence of any finding that duplicate Advance License produced by the appellant was not genuine. Needless to mention that this order was set aside by this Court in Customs Appeal No. 4 of 2007 on 17.12.2008 and then fresh order was passed. 15. In fresh order passed by the CESTAT dated 08.07.2010, though the weights have not been men .....

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hat weights as certified under the export invoice have attained finality. The impugned order is passed in further appeal preferred against this order by the department. In the impugned order dated 12.05.2014, the aspect of production of duplicate advance license or then dispute about weight being mentioned, has not been gone into. Only one ground is looked into & the appeal came to be dismissed thereby leaving other aspects untouched. 16. In earlier order of the Commissioner dated 25.10.2006 .....

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r export. Based on these certificates, Drawbacks and rebates were sanctioned by the Assistant Commissioner, I.C.D., Nagpur and the Assistant Commissioner, Central Excise Division - I, Nagpur. The Commissioner found that these documents were not contemporaneous documents i.e., in relation to exports with which request for conversion was being processed. The truthfulness or otherwise of one set of documents in such cases cannot be made applicable to the other set of documents merely because such d .....

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ights separately. Their details are contained in the order of the Commissioner dated 22.07.2004. Those are : (A) Advance License Nos. 03101055112/3/0300 dated 26.08.2002 Export item name QTM. UOM FOB(Rs. ) FOB(Currency) 63/241pp woven sacks With/ without liner or With/ without UV stabilizer (2% by wt.) or with/ without coting lamination with Kraft paper. liner 60*90 cms. (p.p.; 57850 kgs &PE 35750 kgs.; total wt. 93600) 650000.00 00 Number 4214000 86000.00 (B) Advance License Nos. 0310157442 .....

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and 20.09.2002 respectively. The quantity of Export product has been mentioned in kgs as 23100 kgs, 25200 kgs and 12831 kgs. Thus, total net weight of these three exports is mentioned as 61131 kgs. On next page, the details of two Advance Licenses are given and they are as under : Sr. No. Advance License No. and date Against Export Invoice No. Quantity of Duty Free import of Raw Material 1. 0310155112/3/03/00 Dated 26.08.2002 Exp/02 & Exp/03 PP: 32,257.50 kgs. PE: 19,923.75 kgs. 2. 031015744 .....

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ade the Commissioner on 25.10.2006 by giving the illustration of Exp/01 dated 24.04.2002. Thus, facts on which law needs to be applied are not settled finally in this case. 20. In memo of appeal, the appellant has annexed specimen copy of ARE1 and Shipping Bills as Annexures IV and V. Similarly, a specimen copy of certificate which carries necessary details has been produced with Annexure VI and VII. Copy of one rebate sanction order is produced as Annexure VIII. Similarly, the copies of documen .....

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At this stage it will be proper to take note of the law. The legal provisions in this respect are contained in Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. Rule 12 is the relevant rule, it reads as under : RULE 12. Statement / Declaration to be made on exports other than by Post. ( 1) In the case of exports other than by post, the exporters shall at the time of export of the goods - (a) state on the shipping bill or bill of export, the description, quantity and such othe .....

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arate claim for rebate of duty or service tax under the Central Excise Rules, 2002 or any other law has been or will be made to the Central Excise authorities:] [Provided that if the [Principal Commissioner of Customs or Commissioner of Customs, as the case may be] is satisfied that the exporter or his authorised agent has, for reasons beyond his control, failed to comply with the provisions of this clause, he may, after considering the representation, if any, made by such exporter or his author .....

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there is no change in the manufacturing formula and in the quantum per unit of the imported materials or components, if any, utilised in the manufacture of export goods; and (b) the materials or components, which have been stated in the application under rule 6 or rule 7 to have been imported, continue to be so imported and are not being obtained from indigenous sources. Thus, the Principal Commissioner of Customs or the Commissioner of Customs has been given power or discretion to exempt an exp .....

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tion in the present matter. The second contingency is where exporter files a Shipping Bill under a particular Export Promotion Scheme but benefit of that scheme was denied to him by DGFT or Customs. Again that is not the situation here. 23. It is not in dispute before us that such application for conversion is required to be made within 30 days. Thus, the claim here is also filed beyond stipulated time. Circular No. 40 of 2003 dated 12.05.2003 addresses the grievance of exporters that they are f .....

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lar No. 6 of 2003 with added condition that exporters should not have availed benefit of any Export Promotion Scheme and no fraud/ suspected manipulation and no investigation have been made against the party - exporter in respect of such export. 24. Though it is claimed by the Appellant that the rebate has been allowed only on customs duty paid on finished product and the authorities have accordingly issued certificates mentioning that facility available under Rules 18 and 19 of the Central Exci .....

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e license in discharge of export obligation as per paragraph 4 of the ARE1 dated 5.8.2002. Similar documents in relation to export 2 & 3 on 26.8.2002 and export 4 on 9.9.2002 are not placed before us. Even if Annex. IV is accepted as pertaining to export 2, it is obvious that no advance license need have been claimed against that export. If it could have been claimed, no grievance is possible as it has not caused any prejudice to the appellants. Appellants cannot blame the department for the .....

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e exports for import of duty free raw material is also pointed out. Dates of these two Advance licenses are 26.8.2002 & 9.9.2002 respectively. From contents of application it appears that advance license dated 9.9.2002 is for export 4 where corresponding ARE1 is of date 14.9.2002 & bill of lading is dated 20.9.2002. All these facts find no consideration in order of CESTAT. CESTAT ought to have recorded its findings on all these aspects. The order in original dated 10.2.2011 challenged be .....

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ular dated 16.1.2004, being clarificatory in nature, will apply to even pending applications. It is not seriously attacked before us. Appellant has advanced no arguments to show that it is not clarificatory in nature and takes away any of its vested rights. Question attempted to be raised is whether shipping bills of appellant can be allowed to be converted into DPEB scheme. The object of the scheme is export promotion & it has to be kept in mind while evaluating the present controversy. May .....

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