TMI Blog2011 (9) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. It was, during the searches, that certain materials were detected showing that materials of Tirupur DTA Unit was in fact processed at Madurai (100% EOU) Unit. The statements of Management/Officers were recorded, which revealed that the petitioner availed All Industry Rate of drawback on the goods manufactured/processed at 100% EOU, Madurai. This prompted the Department to initiate proceedings for recovery of the customs duty and penalty. 6. The basis for initiating proceedings for recovery of amount was that the petitioner had failed to bring to the notice of the Department that :- (i) they were bringing material of Tirupur DTA, to be processed at 100% EOU, at Madurai, and sent for export. (ii) The petitioner misdeclared in the shipping bills about the processing of goods at 100% EOU. (iii) As per the conditions in General Notes of Notification Nos. 22/97-Cus. (N.T.), dated 30-5-97, 67/97-Cus. (N.T.), dated 1-7-79, 31/99-Cus. (N.T.), dated 20-5-99, 41/2000-Cus. (N.T.), dated 1-6-2000, 29/2001-Cus. (N.T.), dated 1-6-2001 issued under Rules 3 and 4 of Customs and Central Excise Duty Drawback Rules, 1995. All industry rate is also not available to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was accepted by recording as under :- (a) the issue stand covered squarely by the decisions of the Hon ble Tribunal in the case of three reported judgments relating to the same appellant, i.e., M/s. Leela Scottish Lace Limited v. Commissioner of Customs, reported in 2003 (153) E.L.T. 611 (T), 2003 (156) E.L.T. 548 (T) and 2003 (159) E.L.T. 477. Appellants further submit the case reported in 2003 (156) E.L.T. 548, relates to export of readymade garments through Tuticorin Port itself. (b) the goods produced in the 100% EOU and the goods produced by the DTA are totally distinct and not one and the same and further the 100% EOU, does not have any infrastructure whatsoever to convert cotton yarn into cotton fabric. The assumption that all the readymade garments have emerged only at the 100% EOU by undergoing the process of cutting, making of trimming is factually incorrect and not supported by any evidence. (c) the legal question as to whether, carrying a single or few processes by a 100% EOU would vitiate the right to claim All Industry Rate of drawback by a DTA Unit has been comprehensively answered by the Tribunal Rulings referred supra. (d) the ultimate exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the same for a DTA is clearly misconceived in law. The lower authority has not dealt with this aspect in the order. (l) the issue arising out of Rules 3 and 4 of the Customs and Central Excise Duties and Drawback Rules, 1995 and the definition of manufacture has already been dealt under identical circumstances by the Hon ble Tribunal through the above referred rulings and in the circumstances order is not maintainable in law. (m) the references drawn by the ld. Authority vide Para 7.1 of the impugned order are clearly inconsistent both on fact and in law. Having conceded the fact that there is nothing on record to show or prove that the expenses relating to stitching, etc., were incurred by the EOU to draw an adverse inference. (n) the reasons furnished by the lower authority in seeking to distinguish the decision relied on the petitioners are bad in law. None of the reasons are either relevant or sustainable in law on or facts. After conceding the applicability of these rulings vide para 7.14 of the impugned order, the basis sought to be furnished in distinguishing these judgments in paras 7.11 and 7.12 is clearly inconsistent. The stand of the lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral notes of these notifications, All Industry rate of drawback is not available to the export goods manufactured and/or exported by a unit licensed as 100% EOU in terms of the relevant provisions of the Import and Export policy in force. For proper appreciation of the issue Govt. extracts condition No. 2 of the general notes of the notification. 67/98-Customs (N.T.), dated 1-9-1998 as under :- General Notes 1. ............ 2. The rates of drawback specified in the said Table shall not be applicable to export of a commodity of product if such commodity or product is - (a) manufactured partly or wholly in a warehouses under section 65 of the Customs Act, 1962 (52 of 1962). (b) ..................... (c) manufactured or exported by a unit licensed as hundred percent. Export oriented unit in terms of the provisions of the relevant Import and Export Policy. (d) Manufactured or exported by any of the units situated in Free Trade Zones of Export Processing Zones or Special Economic Zone. (e) ............... (f) ............... (g) ................ The Central Board of Excise Customs, has vide Circular No. 74/99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed products produced by such EOU are exported directly. However, as per facts on record no permission was granted to the respondent or the 100% EOU to process or manufacture goods for or on behalf of the DTA Units. Moreover, even if there was any permission granted to EOU for job work, under the C.B.E. C. Circular mentioned above. Govt. is of the considered opinion that All Industry Rate of Drawback is not admissible on the export of the impugned goods, in view of above provisions contained in condition No. 2(a c) of the general notes of the Govt. Notification Nos. 22/97, 67/98, 39/99, 41/2000 and 21/2001, which clearly says that no drawback under All Industry Rate is admissible in case goods is manufactured/exported by a unit licensed as 100% export orient undertaking. In the instant case as discussed in foregoing paras the respondents have manufactured the export goods out of fabrics processed by a 100% export oriented unit. The C.B.E. C. vide their Circular No. 74/99, dated 5-11-1999, clarified that drawback benefits shall be inadmissible either to EOU or to the DTA units for export of goods manufactured on job work basis for DTA by EOU units. From the above it is seen tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FGM Madurai (100% EOU). Government further notes that Ministry of Finance vide Circular No. 31/2000 (F. No. 609/41/2000-DBK, dated 20th April, 2000) has clarified that in case goods are manufactured and exported from EOU no drawback rate under all industry rate is admissible. However, on such goods brand rate @ 5% has been allowed. Government therefore, of the considered opinion that the ratio of the cited judgment is not applicable in the instant case. Govt. notes that it is settled law that C.B.E. C. circulars are binding on 100% Revenue/Departmental officers as held by the Hon ble Supreme Court in the case Paper Products Ltd. v. Commissioner of Customs - 1999 (112) E.L.T. 765 and in the case Collector of Central Excise, Vadodara v. Dhiren Chemicals Industries Ltd., reported in 2002 (143) E.L.T. 19 (S.C). In view of the above facts and circumstances Govt., feels that impugned Order-in-Appeal, passed by the Commissioner (Appeals), is not maintainable. Govt., accordingly, set aside the impugned order-in-appeal and allows the Revision Application. 19. The learned counsel for the petitioner challenged the impugned order, by contending that the petitioner is entitled to dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is the contention of the learned counsel for the petitioner that the Circular No. 67/98-Cus., dated 14th September, 1998, Circular No. 74/99, dated 5-1-1999 and Circular No. 31/2000-Cus., dated 20th April, 2000, in denying the relief of drawback, deserves to be ignored being contrary to the statutory rules, and notification issued in exercise of statutory powers, under the Act. 23. It is also the contention of the learned counsel for the petitioner, that reading of rules and circulars as well the notifications, leave no manner of doubt that the petitioner is entitled to drawback benefits. 24. In support of this contention, the learned counsel for the petitioner placed reliance on the judgment of the Division Bench of this Court, in the case of Commissioner of Customs, Tuticorin v. L.T. Karle [2007 (207) E.L.T. 358 (Mad.)], wherein this court has been pleased to lay down as under :- The harmonious reading of Circular No. 67 of 1998, dated 14-9-1998 and Circular No. 31 of 2000, dated 20-4-2000 in the light of clause 2(c) of the Notification No. 67 of 1998, dated 1-9-1998 and the proviso mentioned therein, therefore, makes it clear that the DTA units are eligible to sent o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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