2011 (7) TMI 297 - AT - Central Excise

Drawback - fixation of brand rates - CBEC Circular No.39/2001-Cus, dt.06.07.01 - original adjudicating authority should considered the verification report and also the fact that there was a fire accident in the appellant s premises subsequently and the circular which was to be the basis for considering the drawback claim, before reaching the conclusion that the appellants are not eligible for drawback - the original adjudicating authority should once again consider the drawback claims in terms of CBEC circular issued in 1999 as decided by Hon ble Supreme Court and also take into account the verification report already submitted by the authorities and giving an opportunity to the appellant to present their case, if the authorities still find that the drawback claims are not admissible or there are certain omissions - Thus, the matter is remanded to original adjudicating authority for fresh consideration of all the issues except limitation

Summary

Issues:
1. Rejection of refund claim on the ground of limitation and merit.
2. Consideration of drawback claims in accordance with CBEC circulars issued in 1999, 2001, and 2003.

Analysis:
1. Rejection of Refund Claim on the Ground of Limitation and Merit:
The appellant company, engaged in the manufacture and export of Synthetic Fabrics, filed applications for fixation of brand rates for drawback. While several claims were settled, 7 applications faced rejection due to ongoing litigation post the issuance of CBEC Circular No.39/2001-Cus. The authorized representative argued that the rejection based on limitation was unjust as all claims were submitted on time. The lower authority's decision was challenged on the grounds of lack of evidence and proper verification. The Tribunal found the logic used by the lower authority to determine time-barring of claims unreasonable, especially considering the lack of proper documentation and the appellant's submission of a file noting showing timely submission. Consequently, the Tribunal held that the claims cannot be rejected based on limitation.

2. Consideration of Drawback Claims in Accordance with CBEC Circulars:
Regarding the merit of the claims, the authorized representative contended that the claims should be settled based on a Supreme Court judgment emphasizing the binding nature of CBEC Circular No.39/1999-Cus. The Tribunal, however, noted discrepancies in the adjudicating authority's order, highlighting the lack of clarity on communication with the appellant regarding required documents and the impact of a fire accident that destroyed documents. The Tribunal found that both lower authorities failed to address the verification reports and the circumstances surrounding the missing documents adequately. It was unclear whether the authorities were applying the circulars of 1999, 2001, or 2003 in evaluating the claims. Therefore, the Tribunal directed a fresh consideration of the drawback claims in line with the 1999 circular as per the Supreme Court's decision, emphasizing the need for a thorough review of all issues except limitation within 60 days.

In conclusion, the Tribunal remanded the matter to the original adjudicating authority for a comprehensive reevaluation, stressing the importance of adhering to the CBEC circulars and providing the appellant with an opportunity to present their case effectively.