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TMI Blog2011 (2) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... the Circular No.3/01-Cus. dated 16.1.2001, order set aside and allow this appeal by way of remand with a request to the Commissioner to pass fresh speaking order on the issue after hearing the party and considering the relevant EXIM policy provisions, rules, circulars etc. - C/245/02 - - - Dated:- 8-2-2011 - Mr. P.G. Chacko, Mr. Sahab Singh, JJ. Appearance: Shri Prakash Shah, Advocate, for appellant Shri Manish Mohan, Authorised Representative (SDR), for respondent Per: P.G. Chacko The appellant had filed five shipping bills in October 2000 and January February 2001 under DFRC-cum-Drawback Scheme for export of 'dyed and printed man-made fabrics made from 100% polyester filament yarn'. The input used in the exported product was declared as 'dyed polyester fabric'. This declaration was accepted and the goods covered by the shipping bills were allowed to be exported. On the basis of the assessed shipping bills, the appellant obtained duty-free replenishment certificates (DFRCs) from the DGFT. The appellant also claimed drawback for the goods exported. Though, initially, this claim was made under entry No.54.03(a) of the Schedule of Drawback Rates effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz. 'dyed printed man-made fabrics' was exported by the latter under the aforesaid shipping bills which were filed under DFRC-cum-Drawback Scheme. The learned counsel referred to entry No. J-315 of the Standard Input-Output Norms (SION) contained in the Handbook of Procedures under the relevant EXIM Policy and submitted that the appellant had the option to have either grey fabric or dyed fabric used as input in the export product, viz. dyed and/or printed man-made fabrics in terms of the said entry (J-315) and that they were entitled to import dyed fabric on payment of CVD and without payment of other duties of Customs on the strength of DFRCs which were obtained by exporting dyed/printed man-made fabrics manufactured from grey fabrics. He submitted that, in the All Industry Drawback Rates Table, the rates for man-made fabrics falling under Chapter 54 had been determined by taking into consideration the duty suffered on inputs, i.e. yarn, dyes, chemicals and packing materials and that the Central Excise duty payable at the processing stage of the manufacture of these fabrics had not been considered while determining the drawback rates. Therefore, according to the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of inputs imported and cleared on payment of duty if no CENVAT credit had been availed. The learned SDR, in this context, referred to Circular No.33/2000-Cus. dated 2.5.2000, which mentioned the salient features of DFRC scheme. He also referred to Notification No.48/2000-Cus. dated 25.4.2000, which provided for exemption from payment of BCD and SAD on raw materials imported under DFRC issued by the licensing authority under para 7.4 of the EXIM Policy. As per para 2(vi) of the above circular, the benefit of duty-drawback shall be available on the CVD paid on inputs imported under DFRC and also in respect of those duty-paid inputs which are not covered under SION and whose import is not permitted against DFRC. The SDR also referred to Circular No.42/2000-Cus. dated 12.5.2000, which clarified para 2(vi) of Circular No.33/2000-Cus. He heavily relied on Circular No.3/2001-Cus. dated 16.6.2001, wherein it was clarified that All Industry rates for drawback were applicable only to such exports of processed fabrics against DFRC where the input used was POY/fibre/yarn and not applicable to exports of man-made fabrics under DFRC involving grey fabric as input. It was submitted that, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the export product, the appellant cannot claim drawback under Rule 3 ibid. We note that dyed polyester fabric was one of the import items mentioned against entry No. J-315 of SION. This entry is as follows:- S.No Export Item Qty Import Item Qty allowed J315 Dyed and/or printed man-made fabrics 1.0 sq. metre 1.Relevant man-made dyed fabric OR 2. Relevant man-made grey fabric 1.01 sq.metre per sq.mtr. content on the export product. 1.02 sq. metre per sq.mtr. content in the export product It would appear that the EXIM Policy, during the material period, permitted import, under DFRC scheme, of 1.01 sq.mtr. of dyed polyester fabric per sq.mtr. of printed polyester fabric (export product). Similarly, it permitted import, under the said scheme, of 1.02 sq.mtr. of grey polyester fabric per sq.mtr. of dyed printed polyester fabric (export product). It was submitted by the learned counsel that, for dyed printed polyester fabric as export product, the appellant had option to import either grey fabric or dyed fabric. In actual practice, apparently, the appellant imported dyed polyest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst Advance Licence/DEEC Scheme and DFRC Scheme, where the input used is Grey Fabric, should be reviewed and steps be taken to recover the drawback already sanctioned. For future exports, the exporters may be directed to clearly declare on the shipping bills the inputs used in the manufacture of such fabrics and the drawback be allowed strictly only in such cases where the inputs like fibre/POY/yarn are duty paid or where the duty would be payable on such inputs." Relying on the above, the learned SDR has argued that All Industry rates of drawback are applicable only to those exports of processed fabrics under DFRC scheme where the input used is POY (partially oriented yarn)/fibre/yarn and not applicable to the exports of man-made fabrics involving grey fabrics as input. We note that the adjudicating authority did not consider the above circular. As the learned counsel has also claimed support from the same circular, the dispute has to be handled in de novo adjudication of the case. The learned Commissioner has to consider other relevant circulars also. 7. We have also perused para 7.4 of the EXIM Policy 1997-2001, which deals with DFRC. The said para reads as under:- "7.4 D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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