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TMI Blog2013 (3) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue. Further, respondent department has not given any submissions controverting the eligibility of the impugned goods for Drawback claim, in light of above said Notification and circular. - Matter remanded back to adjudicating authority to decide the issue in the light of above said clarification given by C.B.E. & C. X X X X Extracts X X X X X X X X Extracts X X X X ..... des extra neutral alcohol, which is rectified ethyl alcohol of 96.4% V/v. Thus, at four digit level, both Rectified spirits and ENA are classifiable under same head. Further, the HSN clearly provides that neutral alcohols are classifiable under this heading. 4.2 The relevant entry of the Drawback schedule as it stood in the period of dispute is extracted below : Tariff Item Description of goods Unit Drawback when Cenvat facility has not been availed Drawback when Cenvat facility has been availed Drawback Rate Drawback cap per unit in Rs. Drawback Rate Drawback cap per unit in Rs. 22 Beverages, spirits and vinegar 2207 10 90 Rectified Spirit (Ethyl Alcohol) minimum strength of 94.68% V/V at 15.6 degree centigrade Litre Rs. 4.00 NIL The entry above starts with the words "Rectified Spirit (Ethyl Alcohol)". The entry mentions "rectified spirit", which is followed by the words "ethyl alcohol" in parenthesis. This implies that the entry deals with ethyl alcohol. Ethyl alcohol is a chemical compound and is the basis for a huge alcoholic beverage industry. One of the primary modes of manufacturing ethyl alcohol is through the process of fermentation of sugars such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cohol both in the erstwhile entry and the current entry remain more or less the same at 94.5% ethyl alcohol. More importantly, the Drawback entry makes it abundantly clear that the Drawback is for ethyl alcohol and of certain strength and by including all the descriptions, the entry makes it clear that Drawback is admissible for all sorts of ethyl alcohol beyond certain strength. 4.5 The finding that ENA and rectified spirit are two different products is simply perverse. Rectified spirit refers to that spirit that has undergone the process of rectification, i.e. ethyl alcohol that has undergone the process of rectification. Ethyl alcohol when obtained from ferment has a concentration of only about 8 - 10%. It contains other chemicals such as acetones, aldehydes, acids, impurities etc. In order to obtain ethyl alcohol of higher concentration and purity, it must be subjected to rectification. Rectification is defined in Hackh's Chemical Dictionary as "the redistillation of a liquid for purification". Rectification is a continuous process and depending on how many times this process is carried out, one can obtain ethyl alcohol of varying purity level. Such ethyl alcohol is known ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal construction of the said entry, ethyl alcohol that has been rectified in order to obtain strength/concentration of 94.68% or more would fall under this entry. Extra neutral alcohol is nothing but ethyl alcohol that has been rectified to such an extent that the concentration or strength of ethyl alcohol is 96.4%. Ethyl alcohol of concentration 96.4% is obviously more than that of concentration 94.68%. 4.10 Under heading 2207 10, rectified spirit is itself not considered a single product but includes within its scope multiple heading namely 2207 10 11 and 2207 10 19. 2207 10 11 covers concentrates of alcoholic beverages and 2207 10 19 covers residual category of goods. Thus, contention of the department that rectified spirit is a single product and it must have only 94.68% purity ethyl alcohol is incorrect. Further, it can be stated more broadly that as per the classification provided under heading 220710, rectified spirit being classified under this heading can start from 80%. 4.11 If one studies the Customs Tariff Act at the eight digit level and even going by department argument that rectified spirit commercially should have minimum purity of 94.68% upto 96.5% and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be eligible for the duty Drawback. Therefore, the brand rate for ENA would be at least the Drawback available for rectified spirit of 94.68% V/V applying the principles laid down in the Circular. The exporter will get more Drawback if more particulars about duty relatable to other inputs added in the exported product can be supplied. However, the minimum brand rate that would be available on export of ENA would be all industry rate notified for export of rectified spirit (Ethyl Alcohol). Further, the rate is specific and not ad valorem and hence the Central Government should not have any concerns regarding excess Drawback claims. 5. Personal hearing scheduled in this case on 12-12-2011 was attended by Shri L. Badri Narayanan, and Shri Rachit Jain, Advocates, Shri Abbey Philip, DGM and Shri I.B. Lal, President on behalf of the applicant. The applicant mainly reiterated the grounds of revision applications. Shri Chhote Lal, Superintendent appeared in personal hearing on behalf of the Respondent department. The applicants also stated that the C.B.E. & C. has clarified the issue in their favour vide Circular No. 42/2011-Cus., dated 22-9-2011. The respondent department vide their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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