TMI Blog2014 (11) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... /N. 81/2006 the rates of drawback specified in the said Schedule shall not be applicable to export of the commodity or product if such commodity or product is manufactured or exported in terms of sub-rule (2) of Rule 19 of the Central Excise Rules, 2002 - the notification denies the drawback of the entire schedule (whether Excise or Customs components), if the facility of Rule 19(2) of the Central Excise Rules, 2002 is availed. The said conditions are the prime requirement to get the commodity eligible for the drawback. In the case in hand, the Condition No. 7(f) debar the goods from the purview of the drawback if the said goods manufactured or exported availing facility of Rule 19(2) of Central Excise Rules, the drawback was not admissible to the said goods (SBM/DOC) manufactured availing facility of Rule 19(2) of Hexane and/or other materials procured duty free by them and used the same in the manufacture of DOC/SBM. The simultaneous availment of drawback as well as Rule 19(2) was introduced by the respondent No. 2 by omission of Clause 8(f) of erstwhile Notification No. 103/2008 and the introduction of new Clause 9(b) in N/N. 84/2010 which was made effective from 20-9-2010 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner was not entitled to the said AIR drawback towards customs portion if the manufacturers had availed rebate of Central Excise duty under Rule 18 or procured excise duty free inputs under Rule 19(2) of the Central Excise Rules, 2002. The respondent No. 3 at the instance of respondent No. 4 withheld release of AIR drawback to SBM exporters. The petitioners and other exporters as well as industry associations represented the matter to the Directorate of Drawback as well as Central Board of Excise and Customs, New Delhi stating that Drawback on SBM export was towards customs portion and benefit under Rule 18 or 19(2) of Central Excise Rules, 2002 was towards Central Excise portion therefore, there cannot be any reason to withhold Customs drawback if the manufacturers had claimed rebate of Central Excise duty or procured Central Excise duty free inputs. 4. The respondent No. 2 vide Custom Circular No. 35/2010, dated 17-9-2010, while issuing yearly Customs Notification No. 84/2010 of even date, clarified that both the benefits i.e., AIR drawback @ 1% and the benefit of Rule 18 or 19(2) of the Central Excise Rules, 2002 are simultaneously available. The respondent No. 3 commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodity or product which is manufactured or exported by availing the rebate of duty paid on materials used in the manufacture or processing of such commodity or product in terms of Rule 18 of the Central Excise Rules, 2002 or manufactured or exported in terms of sub-rule (2) of Rule 19 of the Central Excise Rules, 2002. 4. The said notification was superseded by Notification No. 84/2010-Customs (N.T.), dated 17-9-2010, effective from 20-9-2010, with a revised Drawback Schedule. The condition No. 9 of Notification No. 84/2010-Customs (N.T.) provided that the rates and caps of drawback specified in columns (4) and (5) of the schedule would not apply to export of a commodity or product which is manufactured or exported by availing the rebate of duty paid on materials used in the manufacture or processing of such commodity or product in terms of Rule 18 of the Central Excise Rules, 2002 or manufactured or exported in terms of sub-rule (2) of Rule 19 of the Central Excise Rules, 2002. Therefore, effective 20-9-2010, the rates and caps under column (6) and (7) of the Schedule became available for such exports. Through Para 4(VI)(d) of Board s Circular No. 35/2010-Cus., dated 17-9-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or rate of drawback is to come into force and the effective date for application of amount or rate of drawback. - (1) The Central Government may specify the period upto which any amount or rate of drawback determined under Rule 3 or revised under Rule 4, as the case may be, shall be in force. (2) where the amount or rate of drawback is allowed with respective effect, such amount or rate shall be allowed from such date as may be specified by the Central Government by notification in the official Gazette which shall not be earlier than the date of changes in the rates of duty on inputs or tax on input services used in the export goods. 10. To buttress his arguments, he drew our attention to the full bench decision of the M.P. High Court in the case of Laxminarayan v. Shiv Gujar Ors., 2003 (1) MPLJ 10 / (LPA No. 641/2000) wherein the full bench has held the following :- We have quoted both the provisions in juxtaposition to comprehend the scenario and further to sensitize ourselves to the controversy in issue. It is well settled proposition of law that enactments dealing with substantive right are primarily prospective unless it is expressly or by necessary implicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Clause 7(f) of Notification Nos. 81/2006 and 68/2007 and Clause 8 of Notification No. 103/2008 were applicable in their case as the benefit of Rule 19(2) of the Central Excise Rules, 2002 was availed for the manufacture of goods exported by the petitioner. Since the petitioner was well aware about non-availability of drawback to him it had fully given the false declaration at the port that the export goods have been manufactured without availing benefit of the said Rule 19(2) and thereby fraudulently availed the drawback of more than ₹ 11 crores. It is also stated that the contention of the petitioner that there drawback was withheld, is incorrect as the said drawback was not legally admissible. The simultaneous availment of drawback as well as Rule 19(2) was introduced by the respondent No. 2 by omission of Clause 8(f) of erstwhile Notification No. 103/2008 and the introduction of new Clause 9(b) in Notification No. 84/2010 which was made effective from 20-9-2010 and explained the same in Circular No. 35/2010. Since the Notification No. 84/2010 was effective from 20-9-2010 and the same cannot be given retrospective effect in light of the aforementioned facts. 15. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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