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2018 (4) TMI 920 - AT - CustomsMaintainability of appeal before Tribunal - 100% EOU - issue of payment of Duty Drawback - case of Revenue is that this is a case of claim of drawback and therefore, the appeal is not maintainable before the Tribunal, in terms of proviso (1) to Section 129A of the Customs Act - whether the appeals are maintainable before this Tribunal or not? - Difference of Opinion - majority order. Held that - Section 129A of Customs Act, 1962 bars the jurisdiction of the Tribunal in respect or any order which relates to, among other things, payment of drawback. If the order impugned before the Tribunal relates to payment of drawback, the Tribunal will not have jurisdiction to decide the same - in the impugned order, has decided the issue whether the appellant is 100% EOU or not, and since the appellant has made the same plea in the present appeal, the present appeal is maintainable in terms of Section 129A. Duty Drawback - Held that - to decide the issue of eligibility of drawback, it is necessary to first decide the issue of the status of the appellant whether they are a 100% EOU or not. The two issues are not totally independent issues. The issue of status of the appellant has to be resolved in order to decide the fundamental issue of entitlement of drawback to the appellant. The pith and substance of the dispute in the appeal is about payment of drawback. The present case will fall within the category of orders against which the appellate jurisdiction of the Tribunal is barred. In view of the decision of the third Member, the appeal is not maintainable before the Tribunal as the same is barred by provisions of Section 129A of Customs Act, 1962
Issues Involved:
1. Maintainability of the appeal before the Tribunal. 2. Status of the appellant as a 100% Export Oriented Unit (EOU) or Domestic Tariff Area (DTA) unit. 3. Entitlement to duty drawback. Detailed Analysis: 1. Maintainability of the Appeal Before the Tribunal: The primary issue to determine was whether the appeal was maintainable before the Tribunal under Section 129A of the Customs Act, 1962. The Tribunal examined the proviso to Section 129A, which states that no appeal shall lie to the Appellate Tribunal in respect of any order relating to the payment of drawback as provided in Chapter X and the rules made thereunder. The Tribunal noted that the order from the Commissioner (Appeals) dealt with the issue of drawback, making the appeal not maintainable before the Tribunal. This was supported by the case of CCE, New Delhi vs. DCS International Trading Company Pvt. Limited, which established that appeals involving drawback claims are barred from the Tribunal's jurisdiction. 2. Status of the Appellant as a 100% EOU or DTA Unit: The appellant contested their status as a 100% EOU, arguing 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 considered the clarification from the office of the Commissioner of Customs, ICD, Tughlakabad, which stated that the appellant never operated as an EOU. The Tribunal also referred to the Foreign Trade Policy, which requires an EOU to be customs bonded. Since the appellant did not fulfill this requirement, the Tribunal concluded that the appellant's unit was not a 100% EOU but a DTA unit. 3. Entitlement to Duty Drawback: The Tribunal addressed whether the appellant was entitled to duty drawback. The Revenue's position was that the appellant, having claimed benefits under Section 10B of the Income Tax Act as a 100% EOU, was not eligible for duty drawback. However, the Tribunal found that merely claiming a benefit under the Income Tax Act does not determine the status of the unit under the Customs Act. The Tribunal held that without customs bonding, the unit could not be considered an EOU, and thus, the appellant was entitled to duty drawback as a DTA unit. Separate Judgments Delivered by Judges: Member (Judicial): The Member (Judicial) held that the appeal was maintainable before the Tribunal since the primary issue was the status of the appellant as a 100% EOU or DTA unit, not the payment of drawback. On merits, the Member (Judicial) concluded that the appellant was a DTA unit and entitled to duty drawback. Member (Technical): The Member (Technical) disagreed, stating that the appeal was essentially about the payment of drawback, which is barred under Section 129A. The Member (Technical) emphasized that the primary dispute was about the entitlement to drawback, and the status of the appellant was merely a basis for resolving this dispute. Consequently, the appeal was not maintainable before the Tribunal. Third Member's Decision: The Third Member resolved the difference of opinion by agreeing with the Member (Technical). The Third Member held that the appeal was not maintainable before the Tribunal because the primary issue was the payment of drawback, which falls under the jurisdiction of the Revisionary Authority of the Government of India. Final Order: In light of the Third Member's decision, the Tribunal concluded that the appeal was not maintainable before the Tribunal as it was barred by the provisions of Section 129A of the Customs Act, 1962. The appeal was dismissed on jurisdictional grounds.
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