2016 (8) TMI 479 - AT - Customs

Export incentive drawback section 75 of the Customs Act all industry rate-2% of F.O.B. enquiry - quantum of frozen meat exported Slaughtering upto 500 buffaloes a day approved from APEDA Held that - As per the registration certificate of APEDA, the slaughter permission approved was 500 animals or buffaloes per day whereas as per the processing capacity (170 MT per day of boneless buffalo frozen meat), the appellant could have utilized the meat of more than 500 buffaloes in view of its installed capacity. It is an admitted fact that the Pollution Control Board had not refused consent nor made any further suggestions for compliance to be made. Thus, there was deeming consent in favour of the appellant to slaughter and process more than 500 animals/buffaloes on the expiry of four months from the date of application being 26/9/11. In this view of the matter, we find that the whole case of the revenue is misconceived as the same is based on presumption that the appellant could not have processed more than 500 buffaloes per day in view of the Certificate of APEDA. There is no dispute that the slaughtering capacity has to be, prima-facie, approved by the State Pollution Control Board. section 50(2) of the Customs Act 1962 contravention inadmissible drawback Held that - there is no dispute of export of packing material along with the frozen meat. In this view of the matter, there is no irregularities in the drawback granted to the appellant pursuant to export of frozen meat for which, the remittance is admittedly been received in convertible foreign exchange - drawback on packing material allowed. The concerned authority is directed to immediately refund within a period of 45 days the amount of duty drawback deposited by the appellant in the course of investigation and/or recovered from the appellant with interest as per Rules. Appeal allowed.

Summary

Issues Involved:

1. Whether the appellant-exporter availed inadmissible export incentives by claiming drawback on 17625.465 MT of frozen meat.
2. Allegations of excess export of buffalo meat produced/procured in contravention of APEDA conditions and relevant laws.
3. Allegations of slaughtering more than the approved number of animals per day.
4. Allegations of exporting meat produced from unauthorized slaughtering and in excess of maximum production capacity.
5. Allegations of filing wrong declarations with customs to avail inadmissible drawbacks.
6. Allegations of violating Section 11 of the Foreign Trade (Development & Regulation) Act, 1992.
7. Confiscation and penalties imposed by the adjudicating authority.
8. Appellant's grounds for appeal, including the argument that drawback is not an incentive and compliance with all relevant conditions.

Detailed Analysis:

1. Inadmissible Export Incentives:
The core issue was whether the appellant-exporter availed inadmissible export incentives by claiming a drawback on 17625.465 MT of frozen meat. The appellant argued that the drawback is a rebate of duty or tax on materials used in manufacturing exported goods, as per Rule 2(a) of the Drawback Rules. They emphasized that the basic requirement for entitlement to drawback under Section 75 of the Customs Act is that the goods should be manufactured in India and exported. The appellant contended that they met all conditions for the grant of drawback and that no specific violations were cited in the show cause notice (SCN).

2. Excess Export and Contravention of APEDA Conditions:
The SCN alleged that the appellant made excess exports in contravention of APEDA conditions and Chapter Note-6 of Chapter 2 of Schedule 2 of ITC (HS) Classification. The appellant countered that their meat processing plants were inspected and certified by APEDA, and each export consignment was accompanied by necessary health certificates confirming compliance with all standards.

3. Slaughtering More Than Approved Number of Animals:
The SCN alleged that the appellant slaughtered more than 500 animals per day, which exceeded the APEDA approval. The appellant admitted to slaughtering more than 500 animals but argued that they had applied for an amendment to increase the number to 1000 per day. They also cited the deeming clause under pollution control laws, which they believed granted them implicit consent to slaughter more than 500 animals per day.

4. Unauthorized Slaughtering and Excess Production:
The SCN alleged that the appellant exported meat produced from unauthorized slaughtering and in excess of their maximum production capacity. The appellant contended that their processing capacity of 170 MT per day allowed them to handle more than 500 buffaloes, and they had not sourced meat from unapproved sources. They provided evidence of certificates from veterinary authorities and argued that the allegations were based on assumptions without tangible evidence.

5. Wrong Declarations with Customs:
The SCN alleged that the appellant filed wrong declarations with customs to avail inadmissible drawbacks. The appellant argued that all declarations were based on valid certificates, and no objections were raised at the time of export. They emphasized that the SCN did not specify any particular shipping bills with wrong declarations.

6. Violation of Section 11 of FTDR Act, 1992:
The SCN alleged that the appellant violated Section 11 of the FTDR Act, 1992, making the exported goods prohibited and liable for confiscation under Section 113(d) of the Customs Act. The appellant argued that they complied with all conditions of APEDA and relevant export policies. They provided evidence of certificates and argued that the allegations were based on presumptions without supporting evidence.

7. Confiscation and Penalties:
The adjudicating authority ordered the confiscation of 17625.465 MT of buffalo meat and imposed a fine and penalties. The appellant argued that the goods were not prohibited and that the confiscation order was based on incorrect assumptions. They cited legal precedents to support their argument that confiscation was not justified in the absence of goods being available.

8. Appellant's Grounds for Appeal:
The appellant's grounds for appeal included arguments that drawback is not an incentive, compliance with all relevant conditions, and the absence of evidence to support the allegations. They emphasized that all export consignments were inspected and certified, and no objections were raised at the time of export. They also argued that the deeming clause under pollution control laws granted them implicit consent to slaughter more than 500 animals per day.

Conclusion:
The Tribunal found that the appellant's arguments were valid and that the whole case of the revenue was misconceived. The Tribunal noted that the appellant complied with all necessary conditions and that the allegations were based on presumptions without supporting evidence. The Tribunal allowed the appeal, set aside the impugned order, and directed the concerned authority to refund the amount of duty drawback deposited by the appellant within 45 days.