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TMI Blog2011 (2) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutes a clear suppression or misdeclaration to make gain which was otherwise not enabled under the statutory provisions and therefore the necessary consequences inevitably befalls. We find that the adjudicating authority was fully justified in invoking penalty provisions and there was absolutely no scope or reason for the tribunal to reverse this finding. - 1 of 2005 c/w , 2-4 of 2005 - - - Dated:- 18-2-2011 - D.V. Shylendra Kumar and N. Ananda, JJ. REPRESENTED BY : S/Shri Raveendran, ASG, N.R. Bhaskar, SCGSC and K.N. Mohan, Advocate, for the Appellant. S/Shri Naresh Thacker, A/w, Ajay J.N., Advocates for M/s. K.G. Raghavan, Sr. Counsel, Assts., for the Respondent. [Order per : Shylendra Kumar, J.]. These four tax referred cases are before us for answering the following four common questions arising out of the order dated 10-1-2003 [2003 (156) E.L.T. 548 (Tribunal)] passed in appeal No. C/105/02, No. C/160/02, No. C/161,162/02 and No. C/166/02 by the Customs, Excise and Service Tax Appellate Tribunal (for short, the Tribunal ), South Zonal Bench at Bangalore as indicated in reference orders dated 23-11-2004. These references are consequent to order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under reference by this common order. 4. We had found narration of facts in the statement of case submitted by the Tribunal to be incomplete or inadequate for appreciating the submissions made on behalf of the revenue by its learned Senior Central Government Standing Counsel, initially by Shri N.R. Bhaskar and later Sri Raveendran, learned Additional Solicitor General having joined for making further submissions on behalf of the revenue and on behalf of the respondent-assessee Sri Ajay J.N., learned counsel representing Sri K.G. Raghavan, learned senior counsel and later Sri Ajay J.N., had been joined by Sri Naresh Thacker, learned counsel. We had directed the learned senior Central Government Standing Counsel to submit statement of case with necessary facts for proper adjudication of references. 5. We have heard the arguments spread over for a period of one year by now as the matter was first taken up by this Bench on 5-1-2010 and developments during this period and the need for numerous hearings quite vividly depicted in the orders passed thereafter, which are as under :- DVSKJ/NAJ : 5-1-2010 The Commissioner of Customs at Bangalore, is directed to be present along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty by the exporter claiming drawback. List on 18-1-2010 as requested by Sri K.N. Mohan, learned Junior Standing Counsel appearing for the revenue as also Mr. N.K. Gupta, Joint Commissioner of Customs who has appeared on behalf of the revenue, for which Sri Ajay, learned counsel for the respondent-assessee has no objection. Furnish a copy of this order to Sri K.N. Mohan, learned junior standing counsel appearing for the revenue. DVSKJ/NAJ : 18-1-2010 Mr. B. Bhattacharji, commissioner of customs, Bangalore, is present before this Court. He states that the duty drawback is allowed both on payment of excise duty and customs duty, when the finished product is exported out of the county and when a person effecting export claims duty drawback etc. We are still not convinced, that a duty drawback can be claimed by an exporter, in the absence of the actual payment of customs duty or excise duty incurred on any imported raw material or any locally manufactured goods having been used as an input, for producing a product, which is exported. Mr. K.N. Mohan, learned junior standing counsel appearing for the appellant-revenue seeks two weeks time to place before the Court a wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also stated that the written submission now placed before the Court has the approval of the Finance Ministry. 7. We are sorry to note that with all that, our endeavor and the purpose to understand the scheme of duty drawback, has not materialized and it may be in fitness of things that the architects of al these Rules or one of them may come before this court and explain to us about the duty drawback scheme, its manner of functioning all these days and the present thinking of the Government on this issue, if that is not a taboo for the concerned officer in the Finance Ministry and at any rate, we expect the Commissioner to provide us the statutory provisions in the Act, the relevant Rules and all Board Circulars governing them, compiled in one paper book. Learned Central Government standing counsel, to ensure that the sets of the same are placed before the Court and simultaneously, to furnish a copy of the same to the learned Counsel appearing for the respondent. 8. List this matter on 4-3-2010 as requested by Sri K.N. Mohan, learned junior standing counsel and also, the Commissioner, who is present before the Court. 9. Furnish a copy of this Order to Sri K.N. Mohan, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, its manner of functioning all these days and the present thinking of the government on this issue, if that is not a taboo for the concerned officer in the Finance Ministry and at any rate, we expect the Commissioner to provide us the statutory provisions in the Act, the relevant Rules and all Board Circulars Governing them, compiled in one paper book. Learned Central Government standing counsel, to ensure that the sets of the same are placed before the Court and simultaneously, to furnish a copy of the same to the learned counsel appearing for the respondent. 8. List this manner on 4-3-2010 as requested by Sri K.N. Mohan, learned junior standing counsel and also, the Commissioner, who is present before the Court. 9. Furnish a copy of this Order to Sri K.N. Mohan, learned junior standing counsel for the petitioner. we had directed the matter be listed today to ensure that an informed responsible Officer from the Ministry of Finance is present before the Court to assist the Court, particularly to apprise us about the background of scheme of duty drawback, its working in practice, the object of providing duty drawbacks and the scheme visualised in the Ministry of Finance for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We direct the matter to be listed after four weeks i.e., on 8-4-2010. 9. As Mr. Pramod Kumar indicates that needful can be done within three weeks and thereafter, the learned Central Government Standing Counsel can place it before the Court in a proper manner, after furnishing a copy of the same to the learned counsel for the respondent so that even the learned counsel for the respondent will be in a position to respond to the same, within the available weeks time thereafter. 10. The further supplemental written submissions or other inputs be placed before the Court by filing the same in the Registry, after furnishing a copy of the same to the learned counsel for the respondent on or before 1-4-2010. 11. Furnish a copy of this order to the learned Central Government standing counsel. DVSKJ/NAJ : 22-6-2010 Mr. Naresh Thakkar, who has appeared for the respondent-assessee made submissions regarding statutory scheme, particularly the provisions of section 75 of the Customs Act, 1962; that while expressions of All Industry rate of drawback and brand rate of drawback with reference to statutory provisions of practicing trade has been all along to recognise distinctions betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 75 of the Customs Act is the specific enabling provision, permitting duty drawback of import duty paid on inputs of goods, which are exported, we find a like provision is absent in section 37 of the Central Excise and Salt Act, which is a provision enabling Central Government, enacted to frame rule for the purpose of implementing and working of the Central Excise Act and is not for the purpose as contemplated under section 75 of the Customs Act. Sri Naresh Thakkar, seeks time to clarify on this aspect of the matter. We grant six weeks time to enables the learned counsel to equip himself on this aspect, and to make further submissions. List these matters on 3-8-2010 for further hearing . DVSKJ NAJ : 3-8-2010 Though we have made an attempt to understand the facts of present case, for which purpose, the Tribunal had submitted a statement of case, as prepared and forwarded by the Tribunal, we find the statement of case sent to this Court by the Tribunal lacks necessary and basic facts for answering the questions under reference. We are expressing our dismay at the haphazard and careless manner in which the Tribunal has forwarded the statement of case without indica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are required to be examined and answered. 1 Whether the CEGAT has committed an error in holding that the Order-in-Original is bad as it allowed duty drawback as per the Board Circular No. 67/1998, read with Board Circular No. 74/1999-Cus.? 2. Whether the CEGAT was right in allowing the Appeal and awarding the drawback as per All Industry Rates against the provision of Notification No. 67/1998, Board Circular No. 67/1998 and 76/1999? 3. Whether the respondent was eligible for drawback as per all Industry Rate or Branch Rage? 4. Whether the order of the CEGAT runs contrary to the Rules, Circulars, Notification and Procedures as prescribed under the Customs Act for allowance of duty drawback by the respondent? 6. Mr. Mohan, learned Junior Standing Counsel for Central Excise, Customs and Service Tax, appearing on behalf of revenue in these references submits that paper book could not be filed as these cases had been entrusted to him by way of transfer of the brief from another Counsel. 7. That cannot be an excuse for depriving the Court the relevant case papers and documents and getting papers. It is the responsibility of the Commissioner of customs, who has sought throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned standing counsel appearing for the petitioners, who had embarked upon to submit that some paper book is filed pursuant to the directions issued by this court, later on apologizes to the court, submitting that neither the commissioner nor the counsel have properly understood the order for necessary compliance. This again, reflects the sorry state of affairs that prevails not only in the department of revenue of the finance ministry, Government of India, but also lack of understanding on the part of their standing counsel, which is all to the detriment of the larger public interest and the people of this country. It is high time people in administrative position and wielding power, reeise their responsibilities and duties and acts with some degree of commitment and sincerity to their work. We keep expressing our dismay, disappointment and disillusionment, but to no avail, as there is no commensurate response from the commission nor the counsel. Our order passed on 3-8-2010 reads as under :- Though we have made an attempt to understand the facts of present case, for which purpose, the Tribunal had submitted a statement of case as prepared and forwarded by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leading to these references. The statement of case does not reveal the basic facts of the case. This Court at the instance of the revenue and in terms of the order passed on 8-10-2003 had opined that the following questions sought for reference by the revenue, are questions which are required to be examined answered. 1. Whether the CEGAT has committed an error in holding that the Order-in-Original is bad as it allowed duty drawback as per the Board Circular No. 67/1998, read with Board Circular No. 74/1999 Cus.? 2. Whether the CEGAT was right in allowing the Appeal and awarding the drawback as per All Industry Rates against the provision of Notification No. 67/1998, Board Circular No. 67/1998 and 76/1999? 3. Whether the respondent was eligible for drawback as per all Industry Rate or Branch Rage? 4. Whether the order of the CEGAT runs contrary to the Rules, Circulars, Notification and Procedures as prescribed under the Customs Act for allowance of duty drawback by the respondent? 6. Mr. Mohan, learned Junior Standing Counsel for Central Excise, Customs and Service Tax, appearing on behalf of revenue in these references submits that paper book could not be filed as thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment submits that he has not understood the contents of the order, there is something radically wrong and something rotting in the finance ministry and the customs department. It is really high time the officials in the customs department and finance ministry pulled up their socks and started performing for a goods measure. We are directing the registry to issue a copy of this order, free of cost, not only to the learned standing counsel appearing for the petitioner but also to the commissioner, so that there is no further confusion, misunderstanding or apologies pleaded before this court for inefficiency and non-compliance. Registry is directed to forward copies of this order to the Secretary, Ministry of Finance, Department of Revenue and the Chairman, Central Board of Excise and Customs for possible remedial and reformative measures. We also express our dismay that the commissioner, who has sought these reference cases for answers to his questions arising in each response, has not been assisting or cooperating with the court for the proper disposal of these matters. It is also causing inconvenience to the respondent and its counsel due to the prolonged hearings of the refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any operation generally or by any particular manufacturer or particular perison carrying on any process or other operation, and interest, if any payable thereon; (aa) For specifying the goods in respect of which no drawback shall be allowed; (ab) for specifying the procedure for recovery or adjustment of the amount of any drawback which had been allowed under sub-section (1) or interest chargeable thereon; (b) for the production of such certificates, documents and other evidence in support of each claim of drawback as may be necessary; (c) for requiring the manufacturer or the person carrying out any process or other operation to give access to every part of his manufactory to any officer of customs specially authorised in this behalf by the Assistant Commissioner of Customs or Deputy Commissioner of Customs to enable such authorised officer on inspect the processes of manufacture, process or any other operation carried out and to verify by actual check or otherwise the statements made in support of the claim for drawback. (d) For the manner and the time within which the claim for payment of drawback may be filed; Which enables the central government t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for any other person including a DTA unit is not entitled to duty drawback at all whether on brand rate basis or All Industry rate basis and treating the respondent-assessee differently only in the present case, while department had extended such benefit earlier in favour of other DTA units notwithstanding rule 3 and the notifications issued for this purpose, that such selective action against the respondent is not definitely fair or proper, particularly for re-opening concluded duty drawback allowed in favour of the assessee; that if data relating to such duty drawback allowed in favour of other DTAs after issue of Circular No. 67/1998 and before issue of Circular No. 31/2000 is placed before the Court, such information will support the stand of the assessee and also indicates as to how the department has treated duty drawback applications filed by DTA units similar to the respondents, during this interregnum. Mr. Raveendra, learned Additional Solicitor General submits that relevant material relating to duty drawback allowed in respect of all DTAs after the year 1995, when duty drawback rules got amended to bring it in conformity with the World Customs Organisation, will be pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. It is open to the respondents-claimants to put such efforts as is warranted, secure the information called for by this court and place the same before the court. As the data is related to figures available at national level, it is necessary that a responsible officer of the central board of indirect taxes or a responsible officer of the ministry of finance to support the material/information by an affidavit of such officer. Sri Raveendran, learned Addl. Solicitor General, submits that such information will be placed before this court within two weeks and the matter may be listed on 3-12-2010. Sri Naresh Thacker agrees for such a courses of action. List the matters on 3-12-2010 for such purpose. Furnish copies of the order dated 12-11-2010 and this order to Sri Raveendran, learned Addl. Solicitor General or his colleagues free of cost. DVSKJ NAJ : 3-12-2010 The petitioner - Commissioner of Customs, Bangalore, has placed before the court the affidavit of Mr. Pramod Kumar, Technical Officer (Drawback), Central Board of Excise and Customs, Department of Revenue, Minsitry of Finance, New Delhi, in response to the direction that has been issued by this court on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the respondent - assessee submits that, the respondent has received copy of this affidavit only last evening and for responding to this affidavit or for furnishing further information on its side, to make good the assertain that such units had been allowed duty drawback in the past needs some time and given a little accommodation if will be placed before this court and requests for some time. List this matter for further hearing on 16-12-2010 and in the meanwhile, it is open to the respondent to file an affidavit if information to the contrary is available with them. DVSKJ/NAJ : 16-12-2010 Sri Raveendran, learned Addl. Solicitor General, appearing for the petitioners and Sri Naresh Thacker, learned counsel appearing for the respondents submits that the matter cannot be taken up today and request to take up the matter on 7-1-2011 and if a full day s hearing is given, it is convenient for the learned counsel to complete the submissions by both sides. Registry is directed to list this matter on 7-1-2011 and since orders from the Hon ble Chief Justice may be sought for the time at which the matter to be listed and list the matter accordingly. 6. There are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary to expunge such remarks. 9. This court does not pass orders keeping in view a particular person or officer. The order of this court is only as a result of inputs, which this court gets either from parties or from their counsel. The orders are passed at what point of time is solely and totally depending on the facts and circumstances of the case as are presented before the court. It is the duty of the court to pass orders on merits of the case. The orders are not intended either to praise or condemn others, it is immaterial as to whether the orders of the court are construed as a praise or remark reflecting on the quality of the concerned officers. 10. It is not necessary for this court to entangle with incidental aspects of this nature and to get active on such incidental aspects but not relative aspects on the orders passed on that context, however for the purpose of order, it is made clear that whatever observations contained in the orders passed by this court are not intended to reflect the performance of any individual. It is a reflection on the system, the entire administrative set-up and functioning of particular department and ministry as it is experienced in our s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspiration for preliminary objections from a judgment of division bench of the very judges of this court in the case of Commissioner of Central Excise, Belgaum v. Fluid Dynamics Pvt. Ltd., reported in 2010 (257) E.L.T. 360 (Kar.) = 2011 (21) S.T.R. 324 (Kar.), wherein this court had occasion to examine the scope of Section 35G of the Central Excise Act, 1944 and found on the facts of particular case an appeal under Section 35G of the Central Excise Act at the instance of revenue was not maintainable and accordingly dismissed the appeals of the revenue at the threshold. 15. Sri Naresh Thacker, learned counsel appearing for the assessee submits that the provision of Section 130A of the Central Excise Act (sic) as it stood at relevant point of time for reference to the court from the orders passed by the Tribunal if orders involve questions of law and if for the opinion of the Tribunal that question required to be further examined and opined by the Tribunal or even if the Tribunal thinks so if the High Court on further application under very section by the aggrieved person seeks a direction to the Tribunal to refer particular question and if the High Court finds that question does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... senior Central Government standing counsel appearing for the Commissioner of Customs, the ratio of judgment in the case of Commissioner of Central Excise, Balgaum v. Fluid Dynamics Pvt. Ltd., is not attracted to the present situation as the matter has reached this court for answering, in reference jurisdiction as enabled under the statutory provision and not by passing or overlooking the provisions by either parties. More importantly, more formidable hurdle in the way of preliminary objections pressed into service by Mr. Thacker is that respondent is virtually estopped from raising such objections before us, while hearing these references, for the simple reason that it should have been raised at a point of time when this court examined the need or otherwise for directing the Tribunal to make a reference. It is also noteworthy a mention herein that even the questions we are required to answer as per this order are the very questions which are being directed by this court to be referred by the Tribunal for our answers. Therefore, there is no question of the preliminary objection coming in the way our examining merits of the present references. 19. If at all the assessee was not ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and it was pointed out that the assessee had wrongly availed such drawback notwithstanding embargo in respect of goods which had been manufactured in a 100% export oriented unit ( EOU for short) and unit situate within export processing zone ( EPZ for short) being denied from claiming such a benefit in terms of Customs Notification No. 67/1998 (N.T.) dated 1-9-1998. Duty Drawback This (N.T.) Notification contains New All Industry (AI) Rates of Drawback effective September 2, 1998. The Notif. Has been issued in the form of a Book, i.e. Duty Drawback on Exports . It is available from the Customs Department throughout the country. The highlights of the new DBK AI rates are : SAD and Special Duty Drawback The new levy of 4% Special Addl. Customs Duty has also been taken into account alongwith 5% Special Customs Duty applicable on various imported inputs, while fixing the new drawback rates. Modvat Goods The major benefit extended to all export products on which modvat is restricted to 95%. It compensates the exporters for the 5% Modvat credit which they cannot other wise avail. This removes the disability of 5%, which was making inputs costlier to exporters. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is entitled for duty drawback for goods exported and therefore, requested for dropping of show cause notices. 25. It was also claimed that notification referred to and relied upon by the revenue for re-opening under Section 124 read with Section 125 and 75A of the Customs Act and Rule 65 of the drawback rules does not come in the way of DTA Unit like assessee from claiming the benefit of duty drawback, notwithstanding the goods having been manufactured in a 100% EOU or EPZ. 26. It was urged that whether or not the exported goods were manufactured inside an 100% EOU or EPZ cannot make any difference to claim the benefit provided to an exporter in terms of Section 75A of the Customs Act. 27. The Adjudicating Officer did not find merit in such contention and therefore passed four different orders dated 22-8-2002 on the four show cause notices, after considering the replies and strangely levied penalty of like amount only in adjudicating orders giving rise to reference numbers 2 3 and had chosen not to levy penalties in adjudication orders leading to reference numbers 1 4. 28. These orders were the subject matters of further appeals by the assessee before the Tribunal. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had found that while effecting the export of the goods in respect of which duty drawback had been claimed not all relevant facts had been disclosed; that if it is a fact that export of goods had taken place after getting the same manufactured in a 100% EOU on job work basis by outside manufactures and the 100% EOU undertaking job work for utilizing its idle time of machinery for want of commensurate manufacturing work relating to its own export, the two notifications referred to above came in the way of such benefit or concession of duty drawback being availed by the assessee and it is on such premise, the assessments were reopened and duty drawback claimed and received by the respondent-assessee was directed to be restored to the state. 32. While such was the view of the adjudicating authority, the Tribunal in the assessee s appeal, found that the commissioner had recorded findings on an erroneous or incorrect interpretation of the Notification No. 67 of 1998; that while the notification does come in the way of the goods manufactured in a 100% EOU claiming the benefit of duty drawback on being exported by a DTA when the goods was manufactured in the 100% EOU by availment of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as Circular No. 67 of 1998, while even a 100% EOU or EPZ is permitted to undertake manufacture of goods for outsiders on job work basis, which implies that the raw material supplied by the outsiders, the regour of the notification is in no way relaxed or reduced; that in the background of such legal position, the authorities also having found that the assessee who had claimed duty drawback on the basis that it had allowed its goods to be manufactured in a 100% EOU and EPZ on job work basis [in the instant case all three units being subsidiaries of the assessee and its sister concerns] and having not placed before the authorities any material or proof of any payment of duty in respect of the raw material (inputs) which had been sent to 100% EOU and EPZ, the assessee being not definitely entitled to claim any duty drawback, both because of the legal position and the factual position; that the Tribunal has committed a grave error in law in restoring the duty drawback in favour of the assessee in respect of the so-called exports of goods, which the assessee had claimed to have secured and manufactured in the 100% EOU and EPZ on job work basis; that the Tribunal has virtually procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for operation with effect from 1-6-1999, there is clear embargo for allowing duty drawback in respect of export of any of the commodities/products if such commodity/product is manufactured and/or exported by a 100% EOU in terms of relevant provisions of Export and Import Policy in force and manufactured and/or exported by any of the units situated in the Free Trade Zones/Export Processing Zones (EPZ) as two of the subsidiaries of assessee wherein goods were manufactured or by themselves EOU and another unit where the goods are manufactured and exported are located in EPZ (M/s. Leela Lace International, Cochin). Our attention is drawn to sub-clause (c) and (d) of clause 2 of general notes of notification, relating to denial of duty drawback in certain situations to submit that irrespective of claims put forth by the assessee, assessee was not entitled to claim the benefit available in terms of Section 67A of the Customs Act or in terms of the statutory provisions of rules and notification made in terms of the rules. 40. It is therefore submitted that for the period during which these notifications held the field, assuming that the assessee had got its goods manufactured and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act cannot be denied when the condition for claiming the benefit is fulfilled by the exporter with reference to a notification which had been issued mainly in the context of regulating in the functioning of an export oriented unit. A DTA cannot be denied benefit for mere reason of getting goods manufactured in an 100% export oriented unit, particularly as in the present case, export was not by an export oriented unit but export was on behalf of DTA though the goods were manufactured in 100% export oriented unit. Even in such an event, requirements of Section 75 of the Customs Act are fulfilled and therefore notification cannot be pressed into service to deny the benefit of duty drawback to an exporter like the assessee. 43. Sri Naresh Thacker, learned counsel appearing for the respondent assessee has evaluated his submissions to demonstrate as to how the notification cannot deny in any way the benefit of duty drawback to the assessee. The object of the notification which has to be understood in the manner as contended by the revenue, would defeat the benefit of duty drawback in terms of Section 75 of the Customs Act. 44. Mr. Naresh Thacker, learned counsel appearing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bar. 49. Before embarking and expressing our view while answering the questions, we notice that question No. 3 reading as hereunder is not really a question that had arisen before the Tribunal or had been answered by the Tribunal one way or the other warranting our answer to this question and therefore we find it unnecessary to examine and answer question No. 3 reading as hereunder :- Whether the respondent was eligible for Drawback as per All Industry Rate or Brand Rate? 50. On our pointing out this situation to the learned counsel appearing for the parties, both Sri Naresh Thacker, learned counsel appearing for the respondent-assessee and Sri N.R. Bhaskar, learned Senior Central Government Standing Counsel appearing for the revenue agree this precise question did not arise before the Tribunal and the Tribunal has not recorded by finding one way or the other. 51. Accordingly, we examine the other questions. The real question though is distributed in the three questions viz., common question in TRC Nos. 1, 2 and 4 of 2005, is one which can be put into one question as to whether the Customs Notification No. 67/1998 read with circular of even number and customs notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every part of his manufactory to any officer of customs specially authorised in this behalf by the Assistant Commissioner of Customs to enable such authorised officer to inspect the processes of manufacture, process or any other operation carried out and to verify by actual check or other wise the statements made in support of the claim for drawback. (d) for the manner and the time within which the claim for payment of drawback may be filed; 53. It is also fact that central government has referred the Rules known as the Customs and Central Excise Duties Drawback Rules, 1995, which though called or terms as Rules, in fact, controls and regulates the operation of the provisions of sub-section (1) of Section 75 of the Act, as is indicated as to what conditions in the ending part of the sub-section (1), reading as under : ..the central government may, by notification in the official gazette, direct that duty drawback shall be allowed in respect of such goods, in accordance with and subject to the rules made under sub-section (2). 54. In terms of the power vested in the central government under sub-section (2) of Section 75 of the Act read with Section 37 of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance licences issued on or after 1st April, 1995 in discharge of obligation in terms of Notification No. 80/95-Cus., dated the 31st March, 1995, or against Advance Licences issued on or after 1st April, 1997 in discharge of export obligation in terms of Notification No. 31/97-Cus., dated the 1st April, 1997, drawback at the rate equivalent to Central Excise allocation of rate of drawback specified in said Table shall be admissible subject to the condition specified therein. Provided further that where in terms of the notes given under various Serial/Sub-serial Numbers the reduced rates of drawback applicable to the export made against quantity based advance licences have been specified, the said rates shall also be applicable for the exports made against quantity based advance licences issued on or before 31st March, 1995; (c) manufactured and/or exported by a unit licensed as hundred per cent export oriented undertaking in terms of the relevant provisions of the Import and Export Policy in force; (d) manufactured and/or exported by any of the units situated in the Free Trade Zones/Export Processing Zones. (e) manufactured and exported in terms of clause (b) of sub-rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on clause(c), which is one relating to the consequences that befall on goods manufactured and/or exported by 100% EOU units and clause (b) relating to goods manufactured and/or exported by a unit located in an export process zone. Significance is that the respondent-DTA unit had got its goods which it claims to have exported in two of its 100% EOUs and one EPZ and therefore clauses (c) and (d) of Notes :- 2 of the two notifications, are automatically attracted and operate. 60. The language of the notifications, rule and the section, make it very clear that the benefit of duty drawback in respect of goods manufactured at a 100% EOU or EPZ unit is not available when such goods are exported as benefit of duty drawback is available only when the inputs of goods manufactured for exporting had suffered duty i.e. customs duty when imported and even assuming that some part of it has suffered excise duty. 61. Though an attempt was made on behalf of the respondent-assessee by Sri Naresh Thacker, learned counsel, by pointing out that the export whether through a 100% EOU or EPZ or by them as goods had reached the customs port directly from their units and therefore it should be taken or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchanges reserve etc., the significance of the 100% EOU undertaking in terms of the relevant provisions of export-import policy is only to the establishment of a 100% EOU in terms of the policy and nothing more and at any rate the export-import policy cannot regulate or override the provisions of the Act, Rules and the notifications issued under these statutory provisions. In fact, there is no conflict or scope for understanding in the manner as is sought to be submitted by the learned counsel for the respondent-assessee. To this effect is the view taken by the courts including the Supreme Court and the interpretation to be placed in respect of an exemption provision is well settled in law, for use to either to get confused or to take a contrary view and to put the matters beyond any semblance of doubt or controversy we may safely refer to and rely upon the observations contained in the judgment of the Supreme Court in the case of Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies [(2004) 11 SCC 798 = 2004 (166) E.L.T. 23 (S.C.)] and reading as under : 8. It is settled law that in order to claim benefit of a Notification a party must strictly comply with the terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to be given by courts or as is understood by courts by way of a deduction or by way of extension to similar situations. An exemption is only in respect of those circumstances and persons or groups who are specifically mentioned for the exemption and not by way of extension of similar situations or similarly placed persons or even similar goods. 69. It is of considerable significance to understand the provisions of Section 75 of the Act either for the purpose of levy of duty, customs or exercise, or for the purpose of allowing a duty drawback or refund of the levy is in respect of the goods identified in particular form and the assessee like instant assessee comes into the pictures only for the purpose of convenience of collection. 70. Likewise, the benefit of duty drawback is in respect of goods exported if a particular goods has fulfilled the requirement of exemption provision and strictly in terms of exemption provision. On a close and detailed examination of the relevant notification, we find that there is absolutely no scope for manufacturer like the respondent DTA unit to claim the benefit of duty drawback in respect of goods manufactured and exported are manufactured a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend that in terms of the notification issued under the Rules 3 and 4 of the Duty Drawback Rules read with Sections 74, 75 and 76 of the Act and on a harmonious reading of the circulars notification and the statutory provisions and on a reasonable construction of the statutory provisions, the benefit of duty drawback should be given in similar situations, with great respect, we are unable to subscribe to this view and we beg to differ, for the reasons we have already indicated above. In our considered opinion, there is no need to further discuss the details of the judgment in L.T. Karle case, more particularly as the judgment is only of persuasive value and we have, with respect, unable to agree with the reasoning and the line of logic found in judgment of L.T. Karle. 75. Question No. 4 arises in TRC No. 2 and 3 of 2005 and it relates to the justification or otherwise of the levy of penalty on the assess on the premise that it amounted to misdeclaration or suppression for the claim of duty drawback which was otherwise not available to the respondent-assesee. 76. Rather strangely even the adjudicating authority had levied penalty only in two orders, whereas in other two orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief at the time of export. The statement of various persons notwithstanding, since those statements are interpretation of the deponents, and not the correct position of law, as to the owner, manufacturer and exporter of the subject goods. Therefore, not scoring the clauses, which have been held to be a cause for invoking liability for confiscation in para 73 of the impugned order, cannot be upheld. Once, liability for confiscation under Section 113(i) is not found, as also there is no other allegation of mis-delcaration of material facts about description, value and quantity of the goods under export, the penal clause under Section 114(iii) as invoked and applied on the exporter and the other appellant viz., M/s. LSLL cannot be upheld. we find the reasoning given by the Tribunal for reversing the view taken by the adjudicating authority to be very strange to comment in a mild manner, as the reasoning is no reason and does not stand to logic or relevant to the facts. 77. It is the respondent-assessee-DTA unit - which claimed the benefit of duty drawback. It was the duty of the assessee to have placed all facts and figures relating to the manner in which it acquired the goods ..... 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