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2013 (11) TMI 497 - CGOVT - CustomsFixation of brand rate of drawback - Contravention of the proviso (ii) of Rule 3 of the Customs & Central Excise Duties Drawback Rules, 1995 read with Circular No. 3/99, dated 3-2-1999 and Circular No. 41/2005-Cus., dated 8-10-2005 - Held that - Applicant has admitted that proviso (ii) of Rule 3 of Drawback Rules, 1995, and C.B.E. & C. Circular 3/99-Cus., dated 3-2-1999 do not allow the duty drawback when customs duty is paid through debit of DEPB scrip. However, he claimed that Circular No. 3/99-Cus. amended vide Circular No. 41/2005-Cus., dated 28-10-2005 to the extent that additional customs duty paid through debit of DEPB scrip shall also be allowed to be considered for fixation of drawback brand rate, and therefore on same analogy the debit of customs duty from DEPB should also be allowed to be considered for fixation of Brand rate. In this regard, Government notes that Circular No. 41/2005-Cus., dated 28-1-2005 allow only additional customs duty paid through DEPB to be considered for fixation of brand rate. So, the contention of applicant to also allow payment of customs duty through DEPB for allowing duty drawback is not legally tenable - Revision denied.
Issues:
1. Application for fixation of brand rate of duty drawback. 2. Rejection of application by lower authorities. 3. Grounds for revision application under Section 129DD of Customs Act, 1962. 4. Condonation of delay in filing revision application. 5. Legal interpretation of DEPB scheme and duty drawback eligibility. 6. Application of Circulars No. 3/99 and 41/2005-Cus. 7. Consideration of DEPB debits for duty drawback. 8. Admissibility of brand rate of drawback against cash payment of duties. 9. Interpretation of Rule 3 of Customs & Central Excise Duties Drawback Rules, 1995. Analysis: The case involves an application by M/s. Dorf Ketal Chemicals for the fixation of brand rate of duty drawback for their export products. The application was rejected by the Additional Commissioner of Central Excise, Belapur, and the rejection was upheld by the Commissioner (Appeals) based on proviso (ii) of Rule 3 of the Customs & Central Excise Duties Drawback Rules, 1995, and Circular No. 3/99-Cus., dated 3-2-1999. The applicant filed a revision application under Section 129DD of the Customs Act, 1962, challenging the rejection. The applicant argued that the DEPB scheme aims to neutralize customs duty payment on export product import content, and DEPB/Duty Drawback are incentives provided by the government, not exemption schemes. They contended that they paid customs duty on raw materials used in finished goods, making them eligible for duty drawback. Additionally, they highlighted the distinction between incentives and exemptions, emphasizing the legality of their duty drawback claim. The applicant also referenced Circular No. 41/2005-Cus., dated 28-10-2005, which they interpreted as allowing duty drawback of Special Additional Duty paid through DEPB. They sought parity in treatment between basic customs duty and Special Additional Duty for duty drawback eligibility. However, the government found that Circular No. 41/2005-Cus. only permitted additional customs duty paid through DEPB for brand rate fixation, not basic customs duty. Regarding the condonation of delay in filing the revision application, the government considered precedents from various High Courts and decided to condone the delay based on valid reasons, allowing the review of the application on merit. Ultimately, the government upheld the lower authorities' decision, finding the applicant's contentions legally untenable and rejecting the revision application for lack of merit. In conclusion, the revision application was dismissed, affirming the rejection of the duty drawback application based on the legal interpretations of relevant rules and circulars governing duty drawback eligibility.
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