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TMI Blog2020 (3) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, who carried out the final processing and thereafter, exported the same. Initially the petitioners' claim for drawback was allowed. Thereafter and invoking Notification No.31 of 1999 dated 20.05.1999, show cause notice dated 02.04.2003 was issued to the petitioner seeking to reverse the drawback granted and recover the same. Order-in-original dated 28.11.2004 was passed confirming the demand along with interest and penalty. 3. The petitioner challenged the aforesaid order by way of appeal and the Commissioner of Customs (Appeals), Chennai by order dated 13.5.2005 rejected the same. The same fate awaited the Review Petition filed by the petitioner challenging the order of the Appellate Commissioner before the Government of India (GOI) that dismissed the review by order dated 29.08.2006. The aforesaid order of the GOI is challenged in W.P.No.4846 of 2007. 4. Learned counsel for the petitioner has drawn my attention to various Notifications and, according to him, a conjoint reading of the same should bring home the position that there is no restriction or prohibition imposed by the Customs Act, 1962 (in short 'Act') for claim of drawback on job work carried out by a 100% EOU. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er from the DTA units or from other EOU/EPZ/EHTP units, provided raw-material for the manufacture of such goods, whether imported or indigenous, shall first reach and be accounted for in the statutory records of the above said units. Subsequently, these raw materials may be sent to the job worker for production of the final products. Final products manufactured from such raw materials shall be brought back from job worker's premises to the unit for accounting. The units will ensure that the wastage generated during the said job work is also brought back from the job workers' premises. 4. Further to utilise the idle capacity of the EOU/EPZ units, it has also been decided that the EOU/EPZ units in textile, readymade garments, agro processing and granite sectors may be permitted to undertake job work from the DTA units provided the finished products produced by such EOU/EPZ units will be exported directly from EOU/EPZ units itself and these goods will not be sent back to the DTA. 5. The instructions cited in para 1 above stand modified to the above extent. 8. This Circular has been issued to ensure full utilisation of the capacity of Export Oriented Units in the Export Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill file the Shipping Bill and where the Shipping Bills of such exports will be assessed. It is clarified that the Shipping Bill in such case will be filed in the name of DTA unit and the name of EOU/EPZ unit will also be mentioned on the Shipping Bill as job worker. In case of job work by EPZ unit, the Shipping Bill will be assessed by the Assistant Commissioner in charge of zone. In case of EOU, as the Shipping Bill is filed at the Gateway Port, the Shipping Bill will be assessed by Assistant Commissioner in charge of Export of any other officer as may be specified by Commissioner of Customs at Gateway Port. However, the name of exporter i.e. the DTA unit and name of job worker i.e. EOU unit shall be required to be mentioned on the invoice and AR-4. Also the AR -4 shall be signed by both parties. It is also clarified that no drawback/DEPB benefits shall be admissible either to EOU/EPZ units or to the DTA unit for such exports.' 10. Then again, in Circular No.31 of 2000 dated 20.04.2000 a further clarification is given in regard to the rate of drawback available as against duty suffered on inputs upon proof being submitted in regard to payment of duty. The Circular reads as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtiles, ready made garments and granite sectors were allowed to undertake job work on behalf of DTA units by Board's Circular 69/98-Cus, dated 14th September 1998. This facility was subsequently extended to the EOU/EPZ units in aquaculture, animal husbandry, hardware, software sector vide Boards Circular No.74/99-Cus, dated 5th Nov, 1999. Now, it has been decided to extend this facility to EOU/EPZ units in all sectors. Further, it has been decided that the DTA units shall be entitled to avail of the brand rate of duty drawback for such job work undertaken by EOUs/EPZ units concerned.' 12. It is the petitioners' case, on a combined reading of the aforesaid Notifications, that i) the Board has permitted EOUs/units in EPZ to engage in processing works/job works in order to optimize production capacity and ii) that the ultimate manufacturer/exporter is entitled to drawback claim in regard to duty component paid on raw materials/inputs, upon proof of payment of duty thereupon. 13. The petitioner relies in this regard, on a decision of the Division Bench of this Court in the case of Commissioner of Customs, Tuticorin V. L.T.Karle & Co. (2007 (207) ELT 358) and of a learned single J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the contention of the petitioner to the effect that any Notification that runs counter to the statutory provisions would have necessarily to be ignored, relying in this connection on the decision of the Division Bench in the case of L.T.Karle (supra). The learned single Judge also records the contention of the respondents therein that the decision of the Division Bench in L.T.Karle (supra) had been challenged by way of Special Leave, however, without it being stayed. 18. Before me, this contention was not raised and neither was a report placed on progress, if any, in that matter. 19. The Division Bench in L.T.Karle (supra) has considered all Notifications referred to before me as also the decisions of the CESTAT in Leela Scottish Lace Ltd., though reversed by the High Court of Karnataka. After an exhaustive discussion in regard to the relevant Notifications, the Bench concludes at paragraph 12.2.9 as follows: '12.2.9. 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btained. Provided further that no drawback shall be allowed. (i) If the said goods, except tea chests used as packing material for export of blended tea, have been taken into use after manufacture; (ii) if the said goods are produced or manufactured, using imported materials or excisable materials or taxable services in respect of which duties or taxes have not been paid; or (iii) on jute batching oil used in the manufacture of export goods, namely, jute (including Bimlipatam jute or mesta fibre), yam, twine, thread, cords and ropes; (iv) if the said goods, being packing materials have been used in or in relation to the export of - (1) jute yarn (including Bimipatam jute or mesta fibre), twist, twine, thread and ropes in which jute yam predominates in weight: (2) jute fabrics (including Bimlipatam jute or mesta fibre), in which jute predominates in weight; (3) jute manufactures not elsewhere specified (including Bimlipatam jute or mesta fibre) in which jute predominates in weight. (v) on any of the goods falling within Chapter 72 heading 1006 or 2523 of the of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)'. 23. A harmonious and purposive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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