TMI Blog2014 (5) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... edings. - Revision application rejected - F. No. 380/07-34/DBK/ 2014-RA - Order Nos. 116-143/2014-Cus - Dated:- 12-5-2014 - Shri D.P. Singh, Joint Secretary Shri Dinbandhu Diwakar, Asstt. Comm., for the Department. Shri Pradip Kalani, Angello Sequera, Export Manager, D.K. Nayyar, Advocate and Jayant Bothra, C.A., for the Assessee. ORDER These revision applications have been filed by Commissioner of Central Excise, Thane-II, Mumbai against the Order-in-Appeal No. 371-398/BPS/MUM/2013 dated 27-9-2013 passed by Commissioner of Central Excise (Appeals), Mumbai Zone-I with respect to Orders-in-Original passed by Additional Commissioner of Central Excise, Thane-II as detailed in the table below. M/s. Deejay Distilleries, Powai, Mumbai are the respondent in this case. Sr. No. Order-in-Original No. Date Order-in-Appeal No. date 1. 12/AK/DBK/Th-II/2013 dated 14-2-2013 371-398/BPS/MUM/2013 dated 27-9-2013 2. MBI/JCH/CCE/13/Th-II/09 dated 4-6-2013 -do- 3. MBI/JCH/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -do- 26. MBI/3CH/CCE/DD/10/Th-II/11-12 dated 3-7-2013 -do- 27. MBI/JCH/CCE/DD/14/Th-II/12-13 dated 3-7-2013 -do- 28. MBI/JCH/CCE/DD/19/Th-II/12-13 dated 5-7-2013 -do- 2. Brief facts of the cases are that respondent M/s. Deejay Distilleries, Powai, Mumbai a merchant exporter exported Indian Made Foreign Liquor (hereinafter referred to as ( IMFL ) under claim for duty Drawback. M/s. Deejay Distilleries Pvt. Ltd. having its manufacturing premises situated at Kolavali, Post - Chinchni Bhawada, Taluka - Dahanu, Distt. Thane, falling under the jurisdiction of Thane-II Commissionerate, is a supporting manufacturer for M/s. Deejay Distilleries, Powai for the purpose of manufacture and export under claim for duty drawback. M/s. Deejay Distilleries, Powai had filed total 17 applications, against various shipping bills, for fixation of Brand Rate under Rule 6 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 in respect of Central Excise duty paid on inputs used in the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on Molasses or it was manufactured from Ethyl Alcohol generated from Grain based. 2.1 Being aggrieved by the said Orders, respondents, filed appeals before Commissioner (Appeals), who vide order-in-appeal No. SB/18 to 34/TH-II/2010 dated 3-2-2010 set aside 17 orders passed by the Additional Commissioner (DBK) Assistant Commissioner (DBK), Central Excise, Thane-II Commissionerate and directed the lower adjudicating authority for fixation of the brand rate as applicable. The Commissioner (Appeals) has decided the appeal mainly considering (a) the purchase orders between M/s. DDPL and its foreign buyers/purchases for supply of IMFL manufactured from Molasses based Ethyl Alcohol, (b) certificates issued by various manufacturers of Ethyl Alcohol that they have supplied Molasses based Ethyl Alcohol to M/s. DDPL, (c) Certificate from State Excise Sub-Inspector that M/s. DDPL have never used Grain based Ethyl Alcohol, for manufacture of IMFL for export purpose (d) letter of Technical Officer (DBK), C.B.E. C., New Delhi bearing F. No. 609/55/2008-DBK dated 21-1-2009. 2.2 Being aggrieved with the Order-in-Appeal dated 3-2-2010 the department filed revision application No. 380 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed appeals before Commissioner (Appeals) who decided all the appeals in favour of respondents vide impugned orders-in-appeal dated 27-9-2013. 4. Being aggrieved by the impugned Orders-in-Appeal, the applicant department has filed these Revision Applications under Section 129DD of the Customs Act, 1962 before Central Government on following grounds :- 4.1 The main issue before the Commissioner (Appeals) was to decide whether the goods, i.e., IMFL , exported is exclusively manufactured from Molasses based Ethyl Alcohol or it is manufactured from Grain based Ethyl Alcohol and whether it is correct to use same brand name on the product for the export goods as well as for domestic market. The Commissioner (Appeals) has mainly relied upon the certificates issued by the jurisdictional central excise and state excise officers. However, there is no reasons given by the appellate authority which can confirm with pinpointed accuracy that the exported goods were manufactured from molasses based ethyl alcohol. 4.2 The Commissioner (Appeals) failed to consider that the Technical Officer (DBK), Government of India, C.B.E. C., vide letter bearing F. No. 609/55/2009-DBK dated 21-1-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported cannot be accepted. 4.5 The Commissioner (Appeals) has failed to consider that the original adjudicating authorities after due scrutiny of the Drawback claim applications filed by M/s. Deejay Distilleries have passed the order, as per the guidelines issued vide Board s Circular No. 14/2003-Cus., dated 6-3-2003, as amended. 4.6 The Commissioner (Appeals) in his order discussed the details of intake of Ethyl Alcohol purchased from various sugar industries, but failed to consider that the same is not disputed by the adjudicating authorities. The basic thing was to prove as to whether the raw material procured (i.e. molasses route) is used in exported goods or otherwise. The Order-in-Appeal is silent on this aspect and failed to prove the nexus. 4.7 The Case relied by the Commissioner (Appeals) in his order are primarily not applicable in the instant case, as it is a basic condition that IMFL should have manufactured by Ethyl Alcohol generated by molasses route, for fixation of brand rate for Drawback. The question of brand name does not arise. In the present case brand names are one and the same for domestic market as well as exported products. 4.8 The major par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured from Grain based alcohol is not exported. Whatever IMFL exported, it is observed from records that it is manufactured from Molasses based alcohol only. 5.3 The point raised that as per Bombay Prohibition Act all Potable Liquor shall bear a label showing name of manufacturer, name of Potable liquor, place of manufacture, alcoholic percentage, batch number, guaranteed fluid contents of each bottle be indicated, and all the labels are required to be submitted to the Commissioner for approval. The exporter has argued that the phrase used in one of the label Blend of Purest malt and Indian Grain Spirit is a sales gimmick, further labels were affixed as per the direction of the purchaser i.e. importer of foreign country. Further while discussing the said contention of the department the Joint Secretary (Review) has accepted the contention of Commissioner (Appeals) going with the chart that exported goods are manufactured from Molasses based Alcohol. However, the JS (Review) that the production and clearance of IMFL manufactured from Grain based alcohol shall also be scrutinized. As per above direction the total production of IMFL for the year 2007-08 2008-09 have been v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Technology, University institute of Chemical Technology, N.M. Parekh Marg, Matunga, Mumbai-400019 is as under :- To analyse liquor sample of IMFL for Grain based Ethyl Alcohol or Molasses based Ethyl Alcohol we are not having facility to Test (Exhibit-XXIX). The Professor of UDCT cannot conclusively give testing report that the IMFL is manufactured from Molasses or Grain based Ethyl Alcohol. The JS (Review) in his order in Para 13 has clarified that test reports of manufacturers or any test laboratory can be relied upon. However, in this case the learned Professor has failed to test the requisite contents. Thus the only way to verify is by Statutory Record. 6. Personal hearing scheduled in these cases on 5-5-2014 was attended by Shri Dinbandhu Diwakar, Asstt. Commissioner on behalf of applicant department and he reiterated grounds of revision applications. The respondents were represented by Shri Pradip Kalani, Shri Angello Sequera, Export Manager of the Company; Shri D.K. Nayyar, Advocate and Shri Jayant Bothra, Chartered Accountant. They mainly reiterated submissions made in their counter reply dated 30-4-2014. 7. Government has carefully gone through the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals in favour of respondents vide impugned orders-in-appeal at 27-9-2013. Now, the applicant department has filed these revision applications ground mentioned in para (4) above. 9. Government notes that vide G.O.I. Revision Order No. 225-241/11-Cus., dated 4-5-2011 the case was remanded for deciding afresh after conducting the complete verification/cross checking of all the relevant statutory records of the manufacturing unit by Central Excise authorities, so as to conclusively determine whether IMFL exported is manufactured out of molasses based Ethyl Alcohol or grain based Ethyl Alcohol. It was also directed that the detailed data analysis done by Commissioner (Appeals) in his Order-in-Appeal and any other Chemical test reports available with manufacturer or any other authority may also taken into account. The original authority has stated that no such test report were available. The detailed verification was got done from Central Excise range Superintendent but the said report was not accepted on the ground stated above. It is on record that original authority did not supply the copy of said verification report to the respondents so as to give them opportunity to file their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their transportation for home consumption or for Export purposes, as the case may be, are under rigid physical control of the State Excise Department. Since Chemical Analysis of the samples of IMFL could not categorically state whether or not the same was produced out of ENA/Ethyl Alcohol drawn from Grain route or Molasses route, it was all the more necessary to rely solely upon the entries made in the Statutory Records maintained by the appellants under State Excise Rules and Regulations. Under such circumstances, one may not simply undermine the State Excise Department s records reports on the captioned subject. The subject reports and certificates issued by the Central/State Excise Authorities are vital documents which cannot be undermined or brushed aside by the Adjudicating Authority as irrelevant and unreliable. 18. I find that the Jurisdictional Superintendent of Central Excise in his subject verification report has heavily relied upon various certificates issued by the State Excise Departmental officers, having jurisdiction over the respective manufacturing unit where from the appellants had purchased the ENA/Ethyl Alcohol during the relevant period. AH these certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the exporter has to execute bond with State Excise authorities for exporting IMFL without payment of State Excise duty that prior to export the exporter has to take pass for export of IMFL in form I from Dy. Supdt. Collector of Thane, that after export one copy of FORM-I duly endorsed by Customs Authority are submitted to State Excise authority as proof of export. The said pass in Form-I contains batch number also. The original authority has not even considered such vital documentary evidences. Government notes that Commissioner (Appeals) has rightly observed that original authority has erred in outrightly rejecting the brand rate fixation application by ignoring the categorical positive finding of Supdt. Central Excise in his verification report stating that IMFL manufactured from molasses based ethyl alcohol was only exported. 12. Government notes that C.B.E. C. letter F. No. 609/55/2009, dated 2-2-2009, clarified as under :- if M/s. Deejay Distilleries use Ethyl Alcohol (94.68% purity), drawn from molasses route, as their raw material to manufacture Whisky/Indian Made Foreign Liquor and exports the same, then adoption of rate prescribed under AIR in respect of ethyl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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