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TMI Blog2010 (4) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned goods were manufactured by M/s. Hyundai Motor India Ltd. (HMIL). The drawback declaration attached to the said shipping bill was signed by both M/s. MMTC (exporter) as well as M/s. HMIL (manufacturer). However, the invoice was seen to be raised on the buyers by M/s. MMTC Ltd. M/s. HMIL later submitted a brand rate letter issued to them by the Superintendent of Central Excise, Chennai-IV Commissionerate and a disclaimer certificate revealed that the goods were exported by M/s. MMTC on behalf of M/s. TATA AIG General Insurance Co. Ltd. It was felt by the department that the nature of the transactions between the three had to be examined before drawback was sanctioned. Hearings were therefore granted to all three parties by the Commissioner on 23-1-06. The representatives of M/s. MMTC and TATA AIG stated that there was no tripartite agreement between them and that M/s. HMIL had abandoned the cars and subsequently their insurance claim of Rs. 25.59 Crores had been settled. The representative of HMIL drew attention to the disclaimer certificate issued by MMTC showing that MMTC would not object to HMIL receiving the drawback benefits. To this the MMTC representative stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Marine Insurance Act, 1963. They also stated that despite the export they still had a net outgo to the tune of Rs. 11,40,29,349/- under this claim, whereas M/s. HMIL's insurance claim had been fully settled by them, hence as rightful owners of the 1194 cars any benefit of drawback should accrue to them (TATA AIG) through exporter M/s. MMTC. 2.3 Vide written submissions dated 6-3-06, M/s. MMTC endorsed the written submissions of TATA AIG and reiterated that they alone were entitled to duty drawback as the insurance company had become the rightful owner of the 1194 cars, that the disclaimer certificate had been issued to M/s. HMIL under duress on 1-7-05 and thus had no validity, they also came up with the complaint that the original EDI free shipping bill No. 2088763, dated 17-6-05 filed by them had been illegally amended by M/s. HMIL; that this would amount to fraudulent tampering of the documents. 2.4 Vide letter dated 17-7-06, M/s. HMIL drew attention to notification 80/2006-Customs (N.T.), dated 13-7-06 issued by the Drawback Directorate wherein Rule 7 sub-rule (1) and sub-rule (3) had been amended with retrospective effect from 1-4-03 to enable a manufacturer to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional Commissioner of Customs (Appeals) who has after due consideration detailed submissions as made therein rejected the same on merits. 4. In the revision application, the applicant has made the following main grounds on the plea that the order-in-appeal be set aside for not being legal and proper because :- 4.1 There was no relinquishment of the right to claim drawback. The applicants had a right to claim the drawback even after surrendering the cars to the insurance company after settlement of the claim restricted to the FOB value. The applicants are a leading manufacturer of passenger cars using both indigenous and imported components in the manufacture of the cars. While the central excise duty paid on the locally procured components and the CVD paid on the imported components are being availed as CENVAT the basic customs duty element involved in the import of components used in the cars exported are being regularly claimed by the applicants by way of brand rate of drawback. For this purpose the brand rate of drawback is being fixed by the Commissioner of Central Excise, Chennai-IV Commissionerate regularly on production of the requisite details, documents and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presented before the drawback sanctioning authority, rejection of the claim on the question of nexus or the lack of it was unjustified. Once the brand rate of drawback has been sanctioned, the question of sanctioning All Industry Rate does not arise as it would be contrary to provisions of Section 75 of the Customs Act, 1962 read with Rule 3 and 7 of the Drawback Rules. 4.7 It could be seen from a harmonious reading of the above provisions of law, that the All Industry Rates and Brand Rates of drawback are mutually exclusive. The brand rate under Rule 7 is determined only when the All Industry Rate of drawback is less than four fifths of the duties paid in the manufacture of the export products. And once a brand rate of drawback is determined under Rule 7, only the Central Government could either revoke or direct the Commissioner of Central Excise or the Commissioner of Customs to withdraw the rate and proceed to sanction drawback at All Industry Rates without the brand rate so determined first being revoked or withdrawn by the Central Government and that this brand rate of drawback determined has not been revoked or withdrawn by the Central Government till date when the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exporter M/s. MMTC issued a disclaimer certificate and informed the applicant and it was neither a threat nor an economic duress and any subsequent retraction of the same is not open to exporter. 4.10 The contention that drawback is payable to the exporter who faces coercive action is not tenable and Rule 16A of the DBK Rules which not at all is applicable herein and facility case of recovery cannot be a ground for grant or rejection of DBK. Finally, the applicants prayed for setting aside the impugned order-in-appeal. 5. The personal hearings in the matter was fixed for 29-10-09 and finally held on 16-2-2010 which was attended by Shri B.L. Narasimhan, Advocate, Sh. A. Mukundrajan and Shri J.W Ryu, GM-Traffic and Customs for and on behalf of the applicants. During personal hearing while reiterating the case matter/issue in brief, it was stressed upon that "disclaimer certificate" given by MMTC was never withdrawn and the same is valid till today and that the brand rate fixed for Commissioner of Central Excise on their application is applicable to them and they are eligible for drawback. 6. Govt. has carefully gone through the records of the case including order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate/amount of Drawback under Rule 7 of DBK Rules does not mean granting of an absolute entitlement irrespective of any type of future happening (i.e. disastrous sunamy as an " Act of God" in this case) which stops, breaks, alters or re-direct, the specific export proceedings before their final completions ( i.e. upto complete realisation of full and final sale proceeds). Similarly, the said disputed and duress effected "Disclaimer" cannot be considered as such a document of legal force that it can stop and divert the proper channel of granting or not of any Drawback benefits as per Chapter X of Customs Act, 1962 along with relevant provisions of applicable Drawback Rules herein. 10. In view of above, Govt. is of considered opinion that once the state of identity of the impugned goods has already changed and once the applicant has abandoned all rights and interests in the "said goods" then, the applicant should and can not have any liaison with any happening (profitable or expenditure) connected with those "abandoned goods". M/s. HMIL had abandoned their rights, title and interest in the impugned goods to the insurance company and had received the insurance claim of Rs. 25.59 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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