2020 (3) TMI 773 - CGOVT - Customs

Duty Drawback - application for fixation of the brand rate rejected - Rule 7(1) of the Drawback Rules - HELD THAT - Rule 7 clearly stipulates that in case the exporter has already availed All Industries Rate (AIR) irrespective of the fact whether it is only in respect of the customs portion or the Customs, Central Excise Service Tax portion together no application under Rule 7 for the fixation of brand rate can be filed. Moreover, the para 7 of the above said notification quoted by the applicant only relates to the All Industries rates of drawback and has nothing to do with the fixation of brand rate under Rule 7 of the Drawback Rules. These are two independent provisions and cannot be linked to claim benefit which is not due. The scope of Notes and Condition No. 7 (supra) is thus limited to granting of Customs portion of drawback even when Cenvat facility is availed. It nowhere stipulates that Customs portion and Central Excise portion can be availed separately and that too by two different entities. Revision application rejected.

Summary

Issues:
1. Rejection of brand rate fixation applications by the Commissioner of Central Excise.
2. Eligibility of exporters for brand rates after availing All Industry Rate (AIR) of drawback.
3. Interpretation of Rule 7 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995.
4. Application of Notes and Conditions No. 7 of Notification No. 110/2015-Cus. (N.T.).
5. Reference to the judgment of the Hon’ble High Court of Bombay in Alfa Laval (India) Limited v. UOI.

Analysis:
1. The judgment addresses the rejection of brand rate fixation applications by the Commissioner of Central Excise. The applicant, a supporting manufacturer for another entity, filed revision applications against the rejection of their requests for brand rate fixation under Rule 7(1) of the Drawback Rules. The Commissioner of Central Excise (Appeals-I) had denied the brand rate fixation citing previous circulars and rules.

2. The main issue discussed is the eligibility of exporters for brand rates after availing the All Industry Rate (AIR) of drawback. The government examined Rule 7, which allows brand rate applications even if AIR is claimed, provided certain conditions are met. However, in this case, the applicant had already claimed AIR, making them ineligible for brand rate fixation.

3. The interpretation of Rule 7 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995 is crucial. The rule stipulates that exporters cannot file for brand rate fixation if they have already claimed AIR under Rule 3 or 4. The judgment clarifies that the applicant's case did not meet the conditions for brand rate fixation under Rule 7.

4. The application of Notes and Conditions No. 7 of Notification No. 110/2015-Cus. (N.T.) is discussed. The applicant argued that they were eligible for the Central Excise portion of drawback under brand rate fixation. However, the judgment emphasized that the notification did not support the applicant's claim for separate Customs and Central Excise portions.

5. The judgment also references the case of Alfa Laval (India) Limited v. UOI to support the applicant's argument. However, it concludes that the subsequent issuance of Notification No. 109/2014-Customs (N.T.) renders the previous judgment inapplicable to the current case. Ultimately, the revision applications were rejected based on the above discussions and interpretations.