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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 ..... owed to MMTC - F. No. 373/90/DBK/2007-RA-Cus - 146/2010-Cus - Dated:- 9-4-2010 - Shri D.P. Singh, J. REPRESENTED BY : S/Shri B.L. Narasimhan, Advocate, A. Mukundrajan and J.W. Ryu, GM-Traffic and Customs, for the Assessee. [Order]. This revision application has been filed by the applicant M/s. Hyundai Motors India Ltd., Kanchipuram against order-in-appeal No. 229/2007, dated 13-4-2007 passed by the Commissioner of Customs (Appeals) Chennai in the matter arising out of order-in-original No. 5554/2006, dated 30-10-2006 as passed by the Assistant Commissioner of Customs (Drawback), Customs House, Chennai. 2. Brief facts of the case are that M/s. MMTC filed an electronic shipping bill which was later converted into a manual shipping bill No. 77506/30-6-05 under claim for drawback under special brand rate for the export of 1194 Nos. of Tsunami affected unused Hyundai Atoz and Accent Cars to M/s. Kirresh Automobile Trading, Jordan. It was declared in the shipping bill that the impugned 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red with their insurance company vide Marine Policy 0800003895, that as a result of the tsunami HMIL had abandoned all rights, title and interest in the 1194 cars vide their letter dated 18-3-05, as a consequence of which all rights, title and interest in the car had lawfully devolved upon them; that they had paid a sum of Rs. 25,58,87,270/- in full and final settlement of the insurance policy which was in consideration of their abandonment of the impugned cars. M/s. TATA AIG had thereafter exported the 1194 cars to Jordan through M/s. MMTC Ltd. as rightful owners of the 1194 cars. They averred that despite this, M/s. HMIL released only 1153 cars up to 30-6-05 and had detained 41 cars on 1-7-05 demanding a disclaimer certificate. They had therefore requested M/s. MMTC to issue the disclaimer certificate, only after which the detained 41 cars were released; that however the disclaimer would be of no effect and could not over ride the effect of abandonment or the express provisions in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimer and had claimed drawback under the All Industry Rate, he was being compelled to reject the claim of the manufacturer-HMIL. 2.6 He also observed that as per the Customs and Central Excise Duty Drawback Rules, 1995, if the export sale proceeds were not realized within the permitted period, drawback could be recovered only from the exporter of such goods. Therefore, there could be no question of recovering the drawback from the exporter if it had been granted to the manufacturer. 2.7 He therefore concluded that when the shipping bill had been filed in the name of MMTC Ltd., they had to be regarded as the exporters, especially as they had also realized the export proceeds. He therefore sanctioned a drawback amount of Rs. 15,83,851/- to M/s. MMTC Ltd., being one percent of the FOB value in terms of drawback schedule-tariff item 87.03. 3. Aggrieved by these orders of the original adjudicating authority the applicant preferred an appeal before the jurisdictional 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued disclaimer. 4.5 When the cars are exported through merchant exporter, drawback eligible to manufacturer and the applicant who avails central excise benefits for exports is also eligible for customs drawback as per following case laws : (a) CCE, New Delhi v. Bhayana Electronics Industries (P) Ltd., 1994 (74) E.L.T. 905 (b) Collector of Central Excise, Bombay v. Gupta Soaps, 1999 (111) E.L.T. (720) (c) Evergreen Plywood Industries (P) Ltd. v. CCE, Patna, 2001 (138) E.L.T. 229 and the question of break of nexus does not arise. 4.6 In the impugned case, all the conditions have been satisfied and the merchant exporter had given the statutory declaration before Customs on the shipping bill itself that the manufacturer (applicant) would be filing an application for special brand rate. When the brand rate was also determined in favour of the applicant and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant alone who can claim brand rate drawback and thus takes a totally different stand. 4.9 In the instant case the exporters M/s. MMTC made a declaration on the Shipping Bill No. 77506 dated 30-6-05, as follows : Provisional claim for fixation of Special Brand Rate being filed with the Commissioner of Central Excise, by the manufacturer M/s. Hyundai Motors India Limited . This declaration was in accordance with Rule 12 ibid and after the declaration was made the export was allowed by the Appraiser on 2-7-05. In terms of the amendment carried out to the Rule on 13-7-06 with retrospective effect from 14-5-03, the drawback could be claimed either by the manufacturer or the exporter. For this purpose either the manufacturer or the exporter could disclaim the drawback in favour of the other. On 1-7-05, the 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Marine Insurance Act and also keeping in view the scope of full and final settlement amounting to Rs. 25,58,87,270/- then Govt. does not find any evidence of confirmatory nature in support of applicant s above plea of entitlement and right to claim the impugned DBK. Further, it being a settled law that Drawback is not an absolute fundamental right but a subjective incentive scheme with the safeguards/riders as per provisions of Customs and Central Excise Duties Drawback Rules, 1955 then it is mandatory and legal that jurisdictional authorities can and should halt, hold, withdraw and/or proceed to recover the (under Rule 16A of DBK Rules) the erroneously sanctioned drawback claim. So, it should be clearly understood that any determination of possible eligibility of 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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