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M/s. R.A. International Versus Commissioner of Customs (Prev.) , W.B., Kolkata

2016 (5) TMI 558 - CESTAT KOLKATA

Eligibility of drawback and imposition of penalty - Section 114AA of the Customs Act, 1962 - Export of fabrics to Bangladesh to perform the job of CMT (Cutting/Making/Trimming) to make finished garments exported directly to Europe from Bangladesh - Sale proceeds are received by the appellant from third country from the buyer of the garments - Drawback disallowed as export of fabrics to Bangladesh does not involve sales and no foreign exchange remittances have come to the Appellant from its job w .....

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the garment purchaser which is more than the value of fabrics at which drawback is claimed. In the present case the products meant to realize foreign exchange are the 'garments' which are manufactured through job-workers in Bangladesh. The pattern of sale has been made clear by the exporter at the time of exports. Under the existing factual matrix of the case it can not be said that proceeds of the fabrics exported have not been realized and accordingly it is held that provisions of Rule 16A of .....

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ties. However, non-registration of units do not necessarily mean that such non-registered units are not existing. On this issue exporters were facing difficulty and CBEC vide Circular No.16/2009-Customs dated 25.05.2009 gave the clarification. Here, there is no point of questioning the Cenvat Credit taken by manufacturers of fabrics as those are not registered with Central Excise, which means no Cenvat Credit on inputs has been taken. Therefore, the Order-in-Original is set aside. - Decided in f .....

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7; 9,68,705/- of the Appellant was disallowed and a penalty of ₹ 50,000/- was imposed upon the appellant under Section 114AA of the Customs Act, 1962. 2. Shri K.K.Sanyal (Consultant) appearing on behalf of the Appellant argued that the period of dispute is 2006-07 during which Appellant exported fabrics under 26 Bills of Export to Bangladesh to perform the job of CMT (Cutting/Making/Trimming) to make finished garments exported directly to Europe (Third Country) from Bangladesh. That paymen .....

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are purchased do not exist as per the reports received from their jurisdictional Central Excise officers. That penalties against the appellant are not attracted as no fraudulent means were adopted by the appellant to claim inadmissible DBK. Learned Consultant made the Bench go through Para-7 of CBEC Circular No.16/2009-CUSTOMS dated 25.05.2009 to argue that as per this clarification drawback claim has to be given even if goods exported are purchased from the open market and that DBK claims of th .....

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f fabrics is effected when the same are sent to job-workers in Bangladesh and no foreign exchange is received for fabrics exported to job-workers. That the certificate produced by the Appellant regarding non-registration of supporting manufacturers were not produced during the course of investigation. That amount of foreign exchange remitted to the Appellant and the description of goods as per LC are different than the goods and value sent to job-workers by the Appellant. Learned AR thus strongl .....

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ized for the garments. Adjudicating authority has mainly rejected the claim on two grounds:- (i) That sending of fabrics to Bangladesh does not involve sale and no sale proceeds are received from job-worker. (ii) That as per the reports of the jurisdictional Central Excise officers the supporting manufactures of fabrics do not exist. 5. So far as point at Para 4(i) above is concerned Rule 16A of Customs, Central Excise and Service Tax Drawback Rules, 1995 (DBK Rules) does refer to recovery of am .....

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claimed. The bill of export specifically mentions that fabrics are meant for readymade garments against a specific Letter of Credit (LC). In an international trade it can never be a case that fabrics are supplied free to a job-worker and the third country buyer of garments will send amounts to the appellant without getting anything. Therefore, the sale proceeds received by the Appellant from the third country buyer, representing sale proceeds of garments, will also include the proportionate pric .....

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of exports. Under the existing factual matrix of the case it can not be said that proceeds of the fabrics exported have not been realized and accordingly it is held that provisions of Rule 16A of the DBK Rules are not attracted. 6. So far as the argument of the Revenue at Para 4(ii) above is concerned Appellant has produced certificates from the jurisdictional Central Excise officers to the effect that supporting manufacturers of exported fabrics are not registered in their jurisdiction. If a ma .....

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