2013 (3) TMI 600 - CGOVT - Customs

Denial of All Industry Rate of Drawback - claim on FOB value - Notification 43/2001-C.E. (N.T.) - whether the drawback specified in the above Schedule at Sr. No. 8701 B is applicable to export of commodity or product when such commodity or product is manufactured or exported by availing benefit of Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001 issued under sub-rule (2) of Rule 19 of Central Excise Rules, 2002 - Held that - respondents have declared in there ARE-2 that the goods were manufactured by availing exemption under Central Excise Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001 issued under Rule 19(2) of Central Excise Rules, 2002. Therefore, the goods manufactured by claiming benefit under Rule 19(2) of Central Excise Rules, 2002 are not eligible for All Industry Rate of Drawback. The respondents have not fulfilled the conditions in the above said Notification. Therefore, the respondents are not eligible for the drawback. - Decided against assessee.

Issues Involved:
1. Eligibility for All Industry Duty Drawback Rates.
2. Interpretation of Notification No. 103/2008-Cus. (N.T.).
3. Applicability of Central Excise Notification No. 43/2001-C.E. (N.T.).
4. Conditions under Rule 19(2) of Central Excise Rules, 2002.
5. Relevance of Ministry of Finance Circular No. 89/2003-Cus.
6. Applicability of subsequent Notification No. 84/2010-Cus. (N.T.).

Issue-wise Detailed Analysis:

1. Eligibility for All Industry Duty Drawback Rates:
The applicants claimed All Industry Duty Drawback Rates on the exported tractors. The original authority sanctioned the drawback at 1% of the FOB value. However, the Commissioner (Appeals) set aside this order, arguing that goods manufactured under Rule 19(2) are not eligible for these rates as per Notification No. 103/2008-Cus. (N.T.).

2. Interpretation of Notification No. 103/2008-Cus. (N.T.):
Notification No. 103/2008-Cus. (N.T.) specifies that the rates of drawback shall not be applicable to products manufactured or exported under Rule 19(2) of Central Excise Rules, 2002. The applicants contended that this notification only concerns the excise portion and should not affect the customs portion of the drawback. However, the government upheld the interpretation that the entire drawback is inapplicable under these conditions.

3. Applicability of Central Excise Notification No. 43/2001-C.E. (N.T.):
The applicants declared in their ARE-2 forms that the goods were manufactured by availing benefits under Notification No. 43/2001-C.E. (N.T.). The government observed that goods manufactured under this notification are not eligible for the All Industry Drawback Rate as per the conditions of Notification No. 103/2008-Cus. (N.T.).

4. Conditions under Rule 19(2) of Central Excise Rules, 2002:
The central issue was whether goods manufactured or exported under Rule 19(2) are eligible for the All Industry Duty Drawback Rates. The government noted that the conditions of Notification No. 103/2008-Cus. (N.T.) explicitly exclude such goods from eligibility, reinforcing the decision to deny the drawback.

5. Relevance of Ministry of Finance Circular No. 89/2003-Cus.:
The applicants cited Circular No. 89/2003-Cus., which clarifies that if input stage duties have been rebated through other schemes, simultaneous relief under the Drawback Scheme is not admissible. The government noted that this circular supports the denial of the drawback when Rule 19(2) benefits are availed.

6. Applicability of subsequent Notification No. 84/2010-Cus. (N.T.):
The applicants argued that they should be eligible for the customs portion of the drawback for exports made after 17-9-2010 under Notification No. 84/2010-Cus. (N.T.). However, the government clarified that this notification cannot be applied retrospectively to exports made before its effective date.

Conclusion:
The government upheld the Commissioner (Appeals) decision, denying the All Industry Duty Drawback Rates for goods manufactured under Rule 19(2) of Central Excise Rules, 2002, as per Notification No. 103/2008-Cus. (N.T.). The revision application was rejected, affirming that the conditions for eligibility were not met.

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