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2016 (7) TMI 416 - GOVERNMENT OF INDIA

2016 (7) TMI 416 - GOVERNMENT OF INDIA - 2016 (344) E.L.T. 702 (G. O. I.) - Claim of duty drawback on inputs - manufacture and export of various brands of liquor - The sanctioning authority disallowed drawback on the declared input molasses - According to the authority, (1) As per proviso (ii) to Rule 3 of the Drawback Rules, no drawback is allowable on the excisable materials in respect of which duties or taxes have not been paid and applicant have not provided evidence of direct duty payment o .....

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cident of payment of duty on the ENA procured by them. Government notes that the ENA has not been declared as an input of the impugned goods by the applicants in their duty drawback application. The applicants have not produced any document evidencing payment of duty by them on the ENA. - The applicant has contended that All Industry Rate of ENA be allowed to them as per Board's Circulars No. 19/2005-Cus dated 21.03.2005 and 83/2003-Cus dated 18.09.2003. It has been noted that Board's Circu .....

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for allowing All Industry Rate of ENA to be allowed is not applicable. - Revision application rejected - Decided against the applicant. - F.No. 375/30/31/32/33/DBK/2013-RA - ORDER NO. 21-24/2016-CUS - Dated:- 26-2-2016 - SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: These Revision Applications are filed by M/S National Industrial Corporation Ltd, Derabassi (hereinafter referred as Applicant) against the Order-in-Appeal No. JALEXCUS-OOO-APP/099 to 102/2013 dated 06.09.2013 passed by the Commiss .....

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From 16.10.2008 to 22.01.2010 the applicants exported the impugned goods for which they filed applications along with Ill A statements, copies of shipping bills and invoices of inputs, for fixation of brand rate of duty drawback under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules 1995 on the basis of incidence of duty paid on the inputs used in the manufacture of impugned goods. The applicants have claimed the duty drawback on duty paid on inputs namely whiskey con .....

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le materials in respect of which duties or taxes have not been paid and applicant have not provided evidence of direct duty payment on molasses. (ii) The applicants have been procuring Extra Neutral Alcohol (ENA) and not the molasses. Also no evidence of duty payment on ENA has been submitted. 3. Being aggrieved by the impugned Order-in-Original, the applicant filed an appeal before the Commissioner (Appeals), who rejected the same vide Order-in Appeal No. JAL-EXCUS-OOO/APP-099 to 102/13-14 date .....

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in the manufacture of ENA which had been supplied to the applicant. That the said authority also erred in rejecting the contention of the applicant that nowhere in the Drawback Rules, it has been provided that the documents evidencing the payment of Central Excise Duty should be in the name of the manufacturer of the export product. That the only requirement is that the product used as an raw material in the manufacture of export products should have suffered Central Excise Duty irrespective of .....

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taxable services in respect of which duties or taxes have not been paid. That the said proviso does not speak about that whether payment of duty as referred to in the proviso should be direct evidence or not. That as per note 5 of DBK I statement proof of payment of Central Excise Duty has to be shown and it has no where provided that invoices evidencing payment of duty should be in the name of the claimant, when evidence regarding duty payment has been provided by way of certificate at the time .....

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o cognizance of the fact that supply of molasses to the distilleries is under the strict supervision of the State Excise Authorities exercising control over the manufacture and sale of liquor whether for domestic consumption or export. That the appellate authority has taken erroneous view in the matter leading to denial of correct brand rate fixation. 4.4. That the department has not specified the provisions of law, which provide that drawback claim under Section 75 of the Customs Act, 1962 cann .....

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ort goods. That the appellate authority has neither disputed the said submission of the applicant nor has noted the provisions of law which specify the requirement that exporter must prove the use of duty paid goods in the manufacture of export goods. That the brand rate fixing authority while fixing the brand rate had given clear findings that applicants had produced documentary evidence regarding consumption and duty paid character of inputs used in the manufacture of export goods. That the fi .....

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under the new description and there was request for clarification. It is clarified that ENA is otherwise covered under the heading 2207 as ethyl alcohol and would cover a// periods, including those prior to 2Ch September, 2010. " 4.6. That it was contended before the appellate authority that when the competent authority had decided to disallow the actual incidence of duty suffered by the raw materials used in manufacture of ENA on the basis of certificate issued by the supplier of ENA ment .....

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es of the products mentioned in the schedule should be taken into account while computing the brand rate of drawback even if the said products are exempt from Central Excise Levy as various inputs used in processing/manufacturing of finished product have suffered levy of Central Excise Duty and duties paid on these inputs remains unrelieved as the finished products are not subject to Central Excise Levy. That taking into account the law laid down in the board circular no. 83/2003-Cus , the All I .....

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incorrect in as much as extra neutral alcohol is the basic raw material without which the export products cannot be manufactured. 4.8. That the appellate authority has erred in arriving to conclusion that the applicant in their drawback application had neither declared ENA as one of their input nor have shown receipt. That the applicant had declared molasses as one of the input for manufacture of ENA, then the question of misstating the facts of receipt of stock and consumption norms of molasses .....

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ase he is not in agreement with the brand rate filed by the drawback sanctioning authority and has also roped in the provision of Rule 15 of the Drawback Rules regarding filing of supplementary claims within a period of 3 months from the date of communication of determined rate of duty drawback. That principles of natural justice invariably have to be followed in each and every case where the claim of the applicant is to be rejected. That the orders passed without following principles of natural .....

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tural justice have been violated. 5. Personal hearings in the matter was fixed on 03.08.2015, 02.09.2015, 15.09.2015 and 05.10.2015. None from Department attended. On 05.10.2015 hearing was attended by Shri G.L. Sawhney, Consultant and Shri Kuldeep Kumar, Account Manager on behalf of the applicant and submitted a written submission pleading therein: 5.1. That the appellate authority rejected the claim of the applicant on the following two grounds: a. That the applicant did not produce any invoic .....

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stator books of accounts maintained under the authority of the State Excise Department and invariable return of one copy of invoice in token of receipt and accounted of goods in their records. 5.3. That the norm of consumption quantity of ENA used in the manufacture of final product they are maintaining a proper record of issue of the ENA used as an input and final product the liquor showing the recovery percentage of liquor from ENA. The applicant submitted the detailed chart of all invoice sh .....

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al of case records, Government observes that the applicant engaged in the manufacture of various brands of liquor filed applications along with DBK1,11,111, Ill A statements, copies of shipping bills and invoices of inputs, for fixation of brand rate of duty drawback under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules 1995 on the inputs used in the manufacture of impugned goods. The applicant have claimed the duty drawback on duty paid on inputs namely whiskey conce .....

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spect of which duties or taxes have not been paid and applicant have not provided evidence of direct duty payment on molasses. (ii) The applicants have been procuring Extra Neutral Alcohol (ENA) and not the molasses. Also no evidence of duty payment on ENA has been submitted. Being aggrieved by the impugned Order-in-Original, the applicant filed an appeal before the Commissioner (Appeals), who rejected the same vide Order-in-Appeal No. JAL-EXCUS-OOO/APP-099 to 102/13-14 dated 06.09.2013. Now the .....

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used as input services in the manufacture of such goods and excisable materials as per Rule 2 (c) of the Drawback Rules means any material produced or manufactured in India subject to a duty of excise under the Central Excise Act, 1944. Rule 3 of the Drawback Rules-Drawback may be allowed on the export of goods at such amount, or at such rates, as may be determined by the Central Government provided that where any goods are produced or manufactured from imported materials or excisable materials .....

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e under, the drawback admissible on the said goods shall be reduced taking into account the lesser duty or tax paid or the rebate, refund or credit allowed. Provisio (ii) to Rule 3 lays downs that no drawback shall be allowed if the said goods are produced or manufactured using material in respect of which duties have not been paid. 9. Further Government observes that the applicants are required to file drawback statement 1,11,111, Ill-A giving thereunder details of inputs used and incidence of .....

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ed or partially used in any previous application. In this case, the applicant failed to comply with the procedure laid down under the relevant rules. 10. As per condition no. 5 of statement DBK-III, the invoices (in original) evidencing payment of Central Excise duty are required to be attached. On perusal of records, Government finds that the appllicant have not furnished any documents in respect of their input molasses instead they have admitted before the appellate authority that they have no .....

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;, means the rebate of duties and taxes chargeable on excisable materials and input services used in the manufacture of impugned goods. Proviso (ii) to Rule 3 of the Drawback Rules categorically provides that no drawback shall be allowed on the excisable material in respect of which duty or taxes have not been paid. The applicants are required to file DBK statements I, Il, Ill, Ill-Ar giving thereunder details of inputs used and incidence of duty paid thereon. In DBK-I statement, the applicants .....

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er condition no. 5 of statement DBK-III, the invoices (in original) evidencing payment of Central Excise Duty are required to be attached. ln DBK-III(A) statement they are to furnish documents relating to payment of Central Excise duty on stocks of indigenous material lying with them from the date, three months prior to the date of first shipment. As such the brand rate of duty drawback are computable on the basis of actual duty payment on the inputs used for manufacture of export goods which is .....

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ut of the impugned goods by the applicants in their duty drawback application. The applicants have not produced any document evidencing payment of duty by them on the ENA. They have also not produced any incoming invoice showing receipt of ENA in their manufacturing premises. Further, the applicants had the option of filing supplementary drawback claim under Rule 15 of the Drawback Rules, 1995 which has to be filed within 3 months of payment or settlement of the original drawback claim by proper .....

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