TMI Blog2018 (4) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to first decide the issue of the status of the appellant – whether they are a 100% EOU or not. The two issues are not totally independent issues. The issue of status of the appellant has to be resolved in order to decide the fundamental issue of entitlement of drawback to the appellant. The pith and substance of the dispute in the appeal is about payment of drawback. The present case will fall within the category of orders against which the appellate jurisdiction of the Tribunal is barred. In view of the decision of the third Member, the appeal is not maintainable before the Tribunal as the same is barred by provisions of Section 129A of Customs Act, 1962 - C/52769-52770/2016-DB - Final Order No. 51071-51072/2018 - Dated:- 16-3-2018 - Mr. Ashok Jindal, Member (Judicial) and Mr. B. Ravichandran, Member (Technical) Shri A.K. Prasad Ms. Surbhi Sinha, Advocates for the Appellant(s) Shri R.K. Manjhi, A.R. for the Respondent(s) ORDER Per : Ashok Jindal The appellants are in appeal against the impugned order wherein the ld. Commissioner (Appeals) dismissed the appeals holding that the appellants is an 100% EOU therefore, they are not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are before us. 3. The matter came up for hearing before this Tribunal. The ld. AR raised the preliminary objection that this is a case of claim of drawback and therefore, the appeal is not maintainable before the Tribunal, in terms of proviso (1) to Section 129A of the Customs Act. The objection raised by the ld. AR was strongly opposed by the ld. Counsel for the appellants. Ld. Counsel submits that the appellant is not challenging the issue of drawback as if it is held that appellant unit is 100% EOU there is no case of the appellant. The appellant is challenging the observations of the authorities below that the appellant s unit is an 100% EOU. Therefore, he prayed that the short issue to be decided by this Tribunal is whether the appellant is 100% EOU or not. 4. Heard the parties. First, the issue to be decided is whether the appeals are maintainable before this Tribunal or not. For better appreciation, proviso (1) to Section 129A of the Customs Act, 1962 are extracted as below:- 129A. Appeals to the Appellate Tribunal . - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order- (a) a decision or order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Commissioner (Appeals) in the case of disallowance of drawback, therefore, we have to see what is issue before us. A similar issue has come up before the Punjab Haryana High Court in the case of Principal Commissioner of Central Excise Service Tax vs. M/s. Raja Dyeing, Ludhiana in CEA-18-2016 (O M) and the Hon'ble High Court vide order dated 14.03.2017 has made the following observations:- 18 . In Commissioner of Central Excise vs. Vimla Roling Mills 2015 (317) ELT 702 (Del.), the following order was passed:- [Order]. - In these appeals by the Revenue, substantial question of law were framed on 24th February, 2014 and 25th February, 2014. However, the High Court does not have jurisdiction to entertain the present appeals under Section 35G of the Central Excise Act, 1944. In the order-in-original, several issues were decided including the question whether the activity undertaken by the respondent-assessee amounts to manufacture. The said question or dispute pertains to levy of duty, which is a question relating to rate of duty as held in CEAC No. 12/2013, Commissioner of Service Tax v. Ernst and Young Pvt. Ltd. and other connected cases decided on 25th Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner (Appeals) in the impugned order. In the impugned order, ld. Commissioner (Appeals) has observed as under:- 5. Discussion and findings: I have carefully gone through the contents of impugned Order, grounds of appeal, and oral as well as written submissions made by the appellants. I find that the issue for discussion and determination in the case is whether findings of the adjudicating authority in impugned order are legally tenable or not. From perusal of evidence on record, I find that acting on an intelligence that EOUs had adopted a modus operandi for availing simultaneous export benefits under different Export Promotion Schemes from different Authorities/Departments by resorting to mis-declaration, the appellant unit i.e. M/s Avanti Overseas Pvt. Ltd. was taken up for investigation by DRI. During the course of investigation,1it was found by DRI that the unit had, wrongly availed duty drawback on the exports done by them and simultaneously had availed exemption from Income Tax Department by declaring themselves as an operational EOLJ. I find the appellant no.1 had set up a unit at Village-Diwana, Distt. Panipat as 100% EOU. A license called Letter of Permission ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry of validity period of extended LOP and as such it remained non functional during the relevant time I find that it is on record that the appellant unit had declared the status of the unit as operational EOU with the Income Tax Department and at the same time claimed that the unit was not EOU. I find that the contention of the appellant is not in consonance with the scheme of EOU. I find that Duty Drawback notification s have carried the Condition/Notes- the rates of Drawback specified in the schedule shall not be applicable to export of a commodity or product if such commodity or product is manufactured and/or exported by a unit licensed as hundred percent export-oriented unit in terms of the provisions of the relevant Export and Import Policy and the Foreign Trade Policy . Thus the necessary inference that emerges is that an Export Oriented Unit which has been issued an LOP by Development Commissioner is not entitled to claim duty drawback benefits irrespective of the fact whether it has claimed any benefit under Income Tax laws, or not and irrespective of the fact whether it has been issued Public Bonded Warehouse License under Section 58 and 65 of the Customs Act, 1962 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port Oriented Unit means a unit for which an LOP has been issue by the Development Commissioner. Once the LOP is granted then in terms of LOP, the applicant is required to execute an LUT and get the unit customs bonded. In this case, although the appellant executed LUT but their unit could not be customs bonded within the validity period of LOP. The said fact has been affirmed by the office of the Commissioner of ICD, Tughlakabad. The relevant part of the said clarification is reproduced hereunder:- It is further mentioned that the party during the period from 13.04.2010 to 30.05.2012 continued to export Stainless Steel Utensils under claim of duty drawback. The party has contended vide aforesaid letters dated 24.10.2011 and 31.05.2012 that (i) They have never set up 100% EOU due to financial constraints and conditions of raw materials prevailing in international markets. (ii) The party has submitted that no plant and machinery was got installed by them during the validity of LOP as per conditions laid down in the LOP. Meanwhile LOP was expired on 31.03.2010 which was not further extended. (iii) Further the party has submitted that no benefit under the EOU scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring uniformity in practice and also to prevent misuse of the facility, the aforesaid instructions issued vide Board s Circular No. 68/95-Cus. dated 15-6-1995 and Circular No. 132/95-Cus., dated 22-12-1995 entrusting the specified functions to the Commissioners are hereby reiterated. However, it is clarified that in case of 100% EOUs, the licensing u/s 58 and grant of permission for in-bond manufacturing facility u/s 65 of the Customs Act, 1962 shall continue to be considered and decided by Assistant Commissioner of Customs or Deputy Commissioner of Customs. 10. We further take note of the fact that appellant has never opted for any benefit of duty under Central Excise or Customs as an EOU scheme in respect of inputs/ capital goods. The sole case of the Revenue is that, as the appellant has claimed the benefit of Section 10B under Income Tax Act as 100% EOU, therefore, the appellant is 100% EOU. Merely by claiming a wrong benefit under the different Act, which is not relevant for the Customs Act, it cannot be held that appellant is 100% EOU and taking benefit from the Income Tax department cannot determine the status of the appellant as 100% EOU. Once, under the Customs Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wback as provided in Chapter X, and the rules made thereunder. f) Commissioner (Appeals) in the impugned order interpreted Notification 68/2007-Cus (NT) which deals with drawback eligibility to the exporters. 2. The above factual deals will make it manifestly clear that the present dispute is essentially with reference to drawback claim filed by the appellant and is clearly barred for appeal before the Tribunal in view of the above statutory provisions. It is clear that the primary dispute is not with reference to the status of the appellant, whether 100 % EOU or not, though the same is the basis for resolving the dispute with reference to the claim of the appellant for drawback. The evidence or reason for a decision by itself cannot be considered as point of dispute. In other words, it is the claim of the appellant for drawback which is the point of dispute and the basis or evidence for resolving such dispute cannot alter the nature or essence of dispute. 3. With due regard, I also find that the case laws referred to by the Id Member (Judicial) have no application to the facts which are narrated above. It is noted that while examining an appeal by the Revenue in DCS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y s order was decided by the Commissioner (Appeals) vide the impugned order dated 10.07.2016 against the appellant. Against such order, the present appeal has been filed. 2. The appeal was heard by the regular bench and learned Member (Judicial) in his order dated 12.12.2017 held that since in the impugned order, the Commissioner (Appeals) decided the issue whether the appellant was a 100% EOU or not, he was of the view that the present appeal is maintainable before the Tribunal and will not be hit by the proviso to that Section 129A barring the jurisdiction of the Tribunal in drawback case. He went on to decide the issue on merit in favour of the appellant. 3. The learned Member (Technical), however, disagreed with the view that the Tribunal had jurisdiction to hear the present appeal. In his dissenting order, he expressed the view that the present dispute is essentially with reference to drawback claim filed by the appellant, and hence, is clearly barred for appeal before the Tribunal as per the statutory provision. He held that the clear and primary dispute is not with reference to the status of the appellant, though the same is the basis for resolving the dispute with ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Honourable Supreme Court in the case of 2004 (167) ELT 3 (S.C.) Tamil Nadu Yana Mandapam Assn. vs. Union of India and submitted that the jurisdiction is to be decided on the basis of the pith and substance of the case. In the present case, the status of the appellant whether 100% EOU or not constitutes the pith and substance of the dispute to decide the payment of drawback. Consequently, he argued that the jurisdiction for such dispute lies before the Tribunal and not before the Joint Secretary (Revisionary Authority). 7. The learned DR argued as follows: (i) The crux of the dispute is regarding the payment of drawback. The status of the appellant whether 100% EOU or not is material in deciding whether drawback is payable or not. Since the order of the lower authority relates to payment of drawback, the Tribunal has no jurisdiction to adjudicate the dispute. (ii) He referred to the Three Member Bench decision of the Tribunal in the case of Commissioner vs. Jindal Stainless Steel Limited in 2012 (285) ELT 118 (Tri. Del) in which a difference of opinion between the Member (Technical) and Member (Judicial) was referred to a Third Member. (iii) On the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , (a) any goods imported or exported as baggage; (b) any goods loaded in a conveyance for importation into India, but which are not unloaded at their place of destination in India, or so much of the quantity of such goods as has not been unloaded at any such destination if goods unloaded at such destination are short of the quantity required to be unloaded at that destination; (c) payment of drawback as provided in Chapter X, and the ruled made thereunder: Provided further that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (d) where (i) the value of the goods confiscated without option having been given to the owner of the goods to pay a fine in lieu of confiscation under section 125; or (ii) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or (iii) the amount of fine or penalty determined by such order, does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orum of appeal. Only in a situation where the Commissioner (Appeals) in the same order decides two issues one issue relating to export rebate and other issue relating to classification/valuation or Cenvat credit and the two issues are totally independent issues, the order of the Commissioner (Appeals) can be treated as two orders one in respect of export rebate and the other in respect of classification or valuation or Cenvat credit and only in such a case different portions of the order can be challenged before different authorities. But in a situation where the main issue is export rebate covered by first proviso to Section 35B(1) and if for deciding the issue relating to export rebate, some other issues have also to be decided, the Tribunal would not have jurisdiction and that order of Commissioner (Appeals) can be challenged only before the Jt. Secretary (RA) by filing a revision application. 12. The decision by the Three Members Bench is to be considered on par with a Larger Bench Decision and is a binding precedent. Applying the ratio of the above case to the current one, I note that in the present case, to decide the issue of eligibility of drawback, it is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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