2013 (8) TMI 233 - CGOVT - Customs

Fixation of Brand rate of Duty Drawback - Whether Commissioner (Appeals) failed to examine the letter/order of the Additional Commissioner wherein the descriptive analysis of all the relevant documents having been thoroughly verified/scrutinized had been provided Held that -Commissioner (Appeals) had therefore rightly allowed the fixation of duty drawback brand rate in the light of said C.B.E. & C. Circular subject to revenue safeguard as mentioned assesse was entitled to All Industry Rate Drawback @ 1.1% under Heading No. 8418 as stands admitted by the original authority - the option of fixation of brand rate available to assesse in terms of Circular cannot be denied - M/s. Suksha International v. UOI 1989 (1) TMI 316 - SUPREME COURT had observed that interpretations of unduly restricting substantial export benefit which otherwise was due as per policy of Government should be avoided - For interpretation of the provisions of the Circular, Government was of view which was as per the observations of ITC Ltd. v. CCE 2004 (9) TMI 103 - SUPREME COURT OF INDIA that simple and plain readings should be adhered to and that provision in the statute as clarified by C.B.E. & C. Circulars were to be religiously followed. It appears that either full facts were not produced/available at the time before him or the respondent exporter was not interested in putting up the case in a legal and proper manner because neither the status of exports was on record nor the exporter appears to be willing to challenge this communication - It was very peculiar situation that department first denied drawback at AIR rate, then subsequently rejected the brand rate fixation application - C.B.E. & C. had categorically stated in the Circular that brand rate of drawback would also be admissible in such case Decided against revenue. Condonation of Delay - Government after due consideration of factual reasons of delay condones the same in exercise of power vested u/s 129DD - delay of 15 days happened due to filing appeal and thereafter realizing the mistake - the revision application had been filed - the delay involved was within the condonable limits of further 3 months.

Summary

Issues Involved:
1. Fixation of Brand Rate of Drawback.
2. Applicability of All Industry Rate of Drawback.
3. Interpretation of Rule 6(1) of Customs, Central Excise Duties & Service Tax Drawback Rules, 1995.
4. Applicability of C.B.E. & C. Circular No. 26/2005-Cus., dated 8-6-2005.
5. Condonation of delay in filing the revision application.

Detailed Analysis:

1. Fixation of Brand Rate of Drawback:
The respondents submitted an application for fixation of brand rate of drawback under Rule 6(1)(a) of Customs, Central Excise Duties & Service Tax Drawback Rules, 1995. The Additional Commissioner (BRU), Pune-I, rejected this application, asserting that the goods exported were complete "Chillers" in SKD condition and classified under Heading 84.18 of the Drawback Schedule, for which an All Industry Rate of Drawback @ 1.1% is available. The Commissioner (Appeals) set aside this rejection and allowed the fixation of the Brand Rate of Drawback after due verification of documents and ensuring that the respondents had not claimed the All Industry Rate of Drawback.

2. Applicability of All Industry Rate of Drawback:
The original authority contended that since a complete "Chiller" was exported, the All Industry Rate of Drawback @ 1.1% was applicable. The respondents argued that their products were shipped in multiple lots due to their size and transportation convenience, thus justifying their application for the Brand Rate of Drawback under Rule 6(1)(a). The Commissioner (Appeals) supported the respondents' claim, referencing the C.B.E. & C. Circular No. 26/2005-Cus., which allows for the Brand Rate of Drawback for goods exported in CKD/SKD conditions.

3. Interpretation of Rule 6(1) of Customs, Central Excise Duties & Service Tax Drawback Rules, 1995:
The original authority rejected the Brand Rate application, citing that Rule 6(1) applies to goods where duty drawback is not available under All Industry Rates. However, the Commissioner (Appeals) and the Government noted that the respondents' exports in SKD condition fulfilled the criteria for Brand Rate of Drawback as per the relevant rules and circulars. The Government upheld the interpretation that Rule 6(1) does not preclude the fixation of Brand Rate if the All Industry Rate is less than the actual duties/taxes suffered.

4. Applicability of C.B.E. & C. Circular No. 26/2005-Cus., dated 8-6-2005:
The Circular stipulates that both All Industry Rate and Brand Rate of Drawback are admissible for goods exported in CKD/SKD/unassembled condition if adequate evidence is provided. The Government emphasized that the Circular should be interpreted plainly and followed religiously. The Commissioner (Appeals) rightly allowed the fixation of Brand Rate in light of this Circular, ensuring revenue safeguards.

5. Condonation of Delay in Filing the Revision Application:
The applicant department sought condonation of a 15-day delay due to initially filing the appeal before the wrong forum (CESTAT). The Government condoned the delay, considering it within the condonable limits of three months under Section 129DD of the Customs Act, 1962, and acknowledged the factual reasons for the delay.

Conclusion:
The Government found no infirmity in the order-in-appeal by the Commissioner (Appeals), which allowed the fixation of Brand Rate of Drawback for the respondents. The revision application filed by the applicant department was rejected as devoid of merit, upholding the respondents' entitlement to the Brand Rate of Drawback as per the C.B.E. & C. Circular No. 26/2005-Cus.