2010 (5) TMI 290 - AT - Customs

Demand - The appellant has filed this appeal against the order to recover the ineligible drawback claim along with the interest passed by the Commissioner of Customs (Export). Drawback as well as Cenvat Credit availed. On realizing the order, reversed the credit along with interest and paid some duty drawback portion with interest. Held that - decision of Chandrapur Magnet Wires (P) Ltd. v. Collector of Cen. Excise, Nagpur 2008 -TMI - 44150 - SUPREME COURT OF INDIA, as relied upon by the assessee not applicable in this case. Reversal of credit does not give the cover of availment of duty drawback. Demand regarding ineligible drawback is sustainable.

Summary

Issues:
Recovery of ineligible drawback claim along with interest.

Analysis:
The appellant appealed against the order to recover an ineligible drawback claim along with interest passed by the Commissioner of Customs (Export). The case involved the appellant procuring duty-free yarn, exporting garments under different schemes, and availing CENVAT credit. The appellant realized their mistake in claiming duty drawback for certain exports and voluntarily paid excise duty and interest. The appellant argued that they reversed the CENVAT credit and should be allowed to claim duty drawback. The appellant relied on a Supreme Court case regarding non-availment of CENVAT credit. However, the respondent contended that reversal of credit is not a substitute for payment, citing a High Court judgment. The Tribunal found that the appellant wrongly availed CENVAT credit and claimed duty drawback on the same goods. The Tribunal distinguished the case law cited by the appellant, emphasizing the importance of maintaining accounts for availing credits. The Tribunal upheld the order to recover the ineligible drawback claim, rejecting the appeal.

This judgment highlights the importance of complying with legal provisions when claiming duty drawbacks and availing credits. It clarifies that reversal of credit does not automatically entitle an appellant to claim duty drawback. The Tribunal emphasized the significance of maintaining proper accounts and following the rules for availing credits. The judgment serves as a reminder for businesses to understand and adhere to the relevant regulations to avoid facing penalties or ineligible claims.