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M/s. Virchow Laboratories Ltd. Versus The Commissioner of C, CE & ST, Hyderabad

2016 (11) TMI 1223 - CESTAT HYDERABAD

Duty drawback - appellant has failed to establish that the goods imported under advance licenses were not utilised on manufacture of exported goods on which duty drawback is claimed - Held that: - Duty drawback is a relief by way of refund of customs/excise duties paid on inputs or raw materials and service tax paid on input services used in the manufacture of export goods - The second proviso to Rule 3 of Drawback Rules, 1995 states that the exporter cannot claim drawback if duties have not bee .....

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ce License used in manufacture being very less the drawback may allowed. I am not able to agree with this contention of appellant. When the Rule itself, does not permit drawback in case of inputs on which duty has not been paid, the appellant ought to have maintained some procedure/ segregation / accounting method for the inputs used in manufacture of products exported, if the appellant intended to claim drawback. The rejection of drawback claim on this ground holds merit. - Appeal dismissed .....

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Ltd., in SEZ, under claim for duty drawback. They filed claims of customs duty draw back in respect of the export consignments. The duty draw back claims were rejected by the adjudicating authority against which the appellant filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) rejected the drawback claims on the ground that the appellant has failed to establish that the goods imported under advance licenses were not utilised on manufacture of exported goods on which duty .....

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the ground for rejection of drawback claim is that the appellant has not been able to establish that the goods imported under Advance Licenses were not utilized for manufacture of goods which were exported and on which drawback is claimed. 3. On behalf of the appellant, the Ld. Counsel Shri. M. Rajendran submitted that the appellant had procured inputs by three different manner. The appellant is using about 27 inputs and out of this, 5 inputs were procured in three different manner i.e., by imp .....

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tion (2) of proviso to Rule 3 of the Drawback Rules, 1995 does not lay down any such condition. 4. That another ground by which original authority rejected the drawback claim is that the claim is time barred. He adverted to Rule 13 of the Drawback Rules 1995 and submitted that the triplicate copy of the shipping bill shall be deemed to be a claim for drawback and therefore the drawback claims are within time. The Ld. Counsel submitted that whatever goods were manufactured using Advance License w .....

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e Department submitted that the appellant has imported inputs using Advance License. This means appellant has procured duty free inputs by using Advance License. The sub-clause (ii) to the second proviso to Rule 3, of Draw Back Rules, 1995 states that drawback claim cannot be allowed, if the goods are manufactured using materials imported duty free. Therefore the rejection of drawback claim is legal and proper. 6. I have heard both sides. One of the grounds for rejection of drawback claim by ori .....

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er a claim for drawback shall be deemed to be a claim for drawback filed on the date on which the proper officer of Customs makes an order permitting clearance and loading of goods for exportation under section 51 and said claim for drawback shall be retained by the proper officer making such order . 6. According to the appellant, as per the above provision, the claim is deemed to have been filed on the date, the proper officer of Customs made an order permitting clearance and export of goods in .....

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thority has therefore put forward the ground of time bar. Computing from the date of presenting the drawback claim to the Central Excise officer. Rule 13 makes it clear that manual application for drawback is not necessary. It is also expressly provided that triplicate copy of Shipping Bill is deemed to be a drawback claim. This facilitates EDI system of drawback claim. He therefore argued that the claim is made within time. I do find force in the argument put forward by the Ld. Counsel as Rule .....

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has pointed out that, the Shipping Bill will show the undertaking given by SEZ unit to pay from their Foreign Currency Account which is stamped therein. The adjudicating authority has refused to accept this undertaking and has called for further document, which in my view is unjustified. The department, the SEZ Officer could very well verify whether the undertaking given by SEZ unit is false or not. Having no case that the amount is not paid from the Foreign Currency Account of SEZ unit, the re .....

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actured using 27 different inputs and out of this only 5 inputs were imported by the appellant. That these five inputs were procured in three different manner. By import under Advance License, by import on payment of duty and by purchase on payment of duty. That the export goods are not wholly manufactured from duty free inputs and therefore 2nd proviso to Rule 3(1) is not attracted. He submitted that only small percentage of 5 inputs were imported without duty under Advance License. That it is .....

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