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2018 (1) TMI 436 - AT - Customs100% EOU - Duty Drawback - Section 129A of the Customs Act - Maintainability of appeal - Difference of opinion - Held that - In view of findings recorded by Member (Tech) and Member (Judicial), the following difference of opinion needs to be resolved Whether the appeal is maintainable before the Tribunal is view of the bar of Section 129A of the Customs Act as held by the Member (Tech) or the appeal can be entertained by the Tribunal and on merit can be decided as held by the Member (Judicial)? - appeal file may be place before Hon ble President for further action.
Issues Involved:
1. Maintainability of the appeal before the Tribunal. 2. Determination of the appellant's status as a 100% Export Oriented Unit (EOU). Issue-wise Detailed Analysis: 1. Maintainability of the Appeal: The primary issue was whether the appeal concerning the payment of drawback is maintainable before the Tribunal as per Section 129A of the Customs Act, 1962. The relevant proviso under Section 129A states that no appeal shall lie to the Appellate Tribunal regarding orders related to the payment of drawback as provided in Chapter X and the rules made thereunder. The Tribunal examined precedents, including the case of CCE, New Delhi Vs. DCS International Trading Company Pvt. Limited, where it was held that appeals concerning drawback claims are not maintainable before the Tribunal. The Tribunal noted that the appellant's contention was not about the drawback per se but about their status as a 100% EOU, which indirectly affects the drawback eligibility. The Tribunal referred to the Punjab & Haryana High Court's decision in Principal Commissioner of Central Excise & Service Tax Vs. M/s. Raja Dyeing, Ludhiana, which emphasized that the nature of the order by the Commissioner (Appeals) determines the maintainability of the appeal. In this case, the Commissioner (Appeals) had decided on the appellant's status as a 100% EOU, thus making the appeal maintainable before the Tribunal. 2. Determination of the Appellant's Status as a 100% EOU: The Tribunal analyzed whether the appellant's unit qualifies as a 100% EOU. The Revenue's argument was based on the appellant claiming benefits under Section 10B of the Income Tax Act, which is available only to 100% EOUs. However, the appellant contended that they never functioned as an EOU because they did not get their premises customs bonded within the validity period of the Letter of Permission (LOP). The Tribunal noted that the appellant had executed a Legal Undertaking (LUT) but failed to get customs bonding, a requirement for functioning as an EOU. The Central Excise authorities clarified that the appellant never operated as an EOU, and the Customs department at ICD, Tughlakabad, released the pending drawback claims based on this clarification. The Tribunal also referred to the Customs Manual and CBEC Circular No.09/2008-cus, which stipulate that an EOU must be customs bonded to receive duty-free raw materials and inputs. Since the appellant did not fulfill this requirement, they could not be considered a 100% EOU. The Tribunal concluded that merely claiming benefits under the Income Tax Act does not determine the status of an EOU under the Customs Act. The appellant's unit did not meet the necessary conditions to be considered a 100% EOU, and thus, it was a Domestic Tariff Area (DTA) unit. Conclusion: The Tribunal held that the appeal is maintainable as it primarily concerns the appellant's status as a 100% EOU, which affects the drawback eligibility. On merits, the Tribunal determined that the appellant's unit is not a 100% EOU due to the lack of customs bonding and other necessary conditions. Consequently, the impugned order was set aside, and the appeals were allowed with consequential relief to the appellant. Separate Judgment by Member (Technical): Member (Technical) disagreed with the maintainability of the appeal, emphasizing that the primary dispute relates to the drawback claim, which is barred from appeal before the Tribunal under Section 129A of the Customs Act. The Member (Technical) argued that the essence of the dispute is the drawback claim, and the status of the appellant as an EOU is merely a basis for resolving the drawback issue. Therefore, the appeal should be dismissed for lack of jurisdiction. Point of Difference for Reference: The difference of opinion between Member (Judicial) and Member (Technical) regarding the maintainability of the appeal under Section 129A of the Customs Act was referred to the Hon’ble President for further action.
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