2014 (5) TMI 1093 - CGOVT - Customs

Fixation of brand rate of DBK on portion of Ethyl Alcohol - Export of Indian Made Foreign Liquor under claim for duty Drawback - Whether IMFL exported is manufactured out of molasses based Ethyl Alcohol or grain based Ethyl Alcohol - Held that - in present revision applications applicant department has again raised the other same point which were decided vide G.O.I. Revision Order No. 225-241/2011-Cus., dated 4-5-2011. It is not legally permissible for department to raise the same points again. The remand proceeding were required to be conducted strictly in accordance with the remand order. In the remand order, it was directed to decide the brand rate fixation application afresh after conducting the complete verification from relevant statutory records of the manufacturing unit to determine whether IMFL exported was manufactured from molasses based ethyl alcohol or not. The verification conducted has established that IMFL exported is manufactured from molasses based ethyl alcohol. As such, there was no option to raise the other ground already decided in earlier revision proceedings. - Revision application rejected

Issues Involved:
1. Whether the exported Indian Made Foreign Liquor (IMFL) was manufactured from molasses-based Ethyl Alcohol or grain-based Ethyl Alcohol.
2. The admissibility of the brand rate fixation for Duty Drawback on Ethyl Alcohol used in the manufacture of IMFL.
3. The validity of certificates and verification reports provided by State and Central Excise authorities.
4. Compliance with procedural and statutory requirements for brand rate fixation.

Detailed Analysis:

1. Whether the exported Indian Made Foreign Liquor (IMFL) was manufactured from molasses-based Ethyl Alcohol or grain-based Ethyl Alcohol:

The primary issue revolved around determining the source of Ethyl Alcohol used in the manufacture of the exported IMFL. The original authority had rejected the request for brand rate fixation on the grounds that the respondents failed to prove that the exported IMFL was made from molasses-based Ethyl Alcohol. The Commissioner (Appeals) had earlier decided in favor of the respondents, but the case was remanded for fresh verification. The remand proceedings confirmed through detailed verification of statutory records that the IMFL exported was indeed manufactured from molasses-based Ethyl Alcohol. The verification included batch-wise production records and certificates from State Excise authorities, which were found to be valid and reliable.

2. The admissibility of the brand rate fixation for Duty Drawback on Ethyl Alcohol used in the manufacture of IMFL:

The fixation of the brand rate for Duty Drawback was initially denied on the basis that the respondents could not conclusively prove the use of molasses-based Ethyl Alcohol. However, the detailed verification conducted during the remand proceedings established that the IMFL exported was made from molasses-based Ethyl Alcohol. The C.B.E. & C. letter dated 2-2-2009 clarified that if Ethyl Alcohol drawn from molasses route is used, the adoption of the rate prescribed under AIR for determination of the Brand Rate of Duty Drawback is permissible. This clarification was applicable, and thus, the brand rate fixation was deemed admissible.

3. The validity of certificates and verification reports provided by State and Central Excise authorities:

The original authority had rejected the certificates issued by State Excise officers, citing a lack of detailed records. However, the Commissioner (Appeals) and subsequent verification reports confirmed that these certificates were based on thorough examination of statutory records maintained under State Excise Rules. The verification report by the Superintendent of Central Excise was found to be a valid and reliable document, establishing that the IMFL exported was manufactured from molasses-based Ethyl Alcohol. The rejection of these certificates by the original authority was deemed unjustified.

4. Compliance with procedural and statutory requirements for brand rate fixation:

The respondents had maintained elaborate statutory records as required under State Excise Rules, which were verified during the remand proceedings. The records and certificates indicated that the IMFL exported was manufactured from molasses-based Ethyl Alcohol. The Commissioner (Appeals) observed that the original authority had erred in rejecting the brand rate fixation application by not considering these vital documentary evidences. The procedural and statutory requirements were found to be met, and the fixation of the brand rate was upheld.

Conclusion:

The Government upheld the Orders-in-Appeal, confirming that the IMFL exported was manufactured from molasses-based Ethyl Alcohol, and the brand rate fixation for Duty Drawback was admissible. The revision applications filed by the department were rejected, as the detailed verification and statutory records supported the respondents' claims. The decision provided consequential reliefs to the respondents, affirming the validity of the certificates and compliance with procedural requirements.

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