2017 (9) TMI 1368 - AT - Central Excise

Drawback - Fixation of brand rate - simultaneous availment of both DEPB and Draw back on the exported product - right to appeal - non-speaking order - Held that - merely because the department chooses to issue a letter denying the benefit instead of issuing a SCN and passing an adjudication order, the appellant cannot be prevented from exerting his right to appeal against such decision - similar issue decided in the case of BHAGWATI GASES LTD. Versus COMMISSIONER OF C. EX., JAIPUR-I 2008 (1) TMI 712 - CESTAT, NEW DELHI , where appeal against the letter of the Superintendent of Central Excise to the effect that suo motu Modvat credit transferred by the appellants was inadmissible, was held to be maintainable. Circular No. 39/2001-Cus. dated 06.07.2001 would allow drawback only based on documents evidencing payment of excise duty on the inputs used in the body portion and not the adhoc rate of 7% fixed by the MOF itself for the product in question under export, considering its peculiarity and other reasons. MOF having clarified about the eligibility of duty drawback vide their letter dated 10.11.2006, the appellants presume that there is no ambiguity on the point that there is no double claim or benefit or the same export product. The appellants seek a chance to make their submission on merits as to how they are entitled for the adhoc rate of 7% drawback fixed by the MOF vide their Circular dated 1988 and also that there is no double benefit of DEPB and Drawback for the same export product ie., body portion contained in fully built vehicle. Matter remanded to the Commissioner of Customs, directing him to give reasonable opportunity for furnishing evidence and for personal hearing - appeal allowed by way of remand.

Summary

Issues:
1. Appeal against rejection of drawback applications.
2. Permissibility of simultaneous availment of DEPB and Drawback benefits.
3. Maintainability of appeal against a letter denying benefits.
4. Interpretation of Circular No. 39/2001-Cus. dated 06.07.2001.
5. Remand of the matter for further consideration.

Analysis:
1. The appeal was filed against the rejection of drawback applications by the Commissioner, conveying that simultaneous availment of DEPB and Drawback on the exported product is impermissible. The appellant challenged this decision before the forum.

2. The appellant argued that as per Circular No. 39/2001-Cus., a combination of DEPB benefits with brand rate of drawback is allowed, subject to specific conditions regarding the availing of Cenvat credit on inputs. The Revenue reiterated that availing Cenvat credit on inputs would disallow DEPB benefits with drawback. The Tribunal examined the contentions of both sides.

3. The Revenue contended that the appeal was not maintainable as it was filed against a letter and not a formal order. However, the Tribunal held that if a decision communicated affects the rights of a party, the appeal should be maintainable. Citing precedents, the Tribunal found the objection raised by the department unsustainable.

4. Upon reviewing the letters from the Ministry of Finance, CBEC, the Tribunal observed that the MOF Circular specified conditions for claiming drawback along with DEPB benefits, emphasizing the need for duty payment documents. The Tribunal noted that the appellants sought to demonstrate their entitlement to the drawback rate fixed by the MOF and clarified that there should be no double benefit for the same export product. Consequently, the matter was remanded to the Commissioner for further consideration.

5. The Tribunal set aside the impugned order and allowed the appeal by way of remand, directing the Commissioner to provide a reasonable opportunity for the appellants to present evidence and have a personal hearing. The decision was pronounced in open court, emphasizing the need for a thorough review of the appellant's entitlement to benefits.