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TMI Blog2013 (6) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... ancially accordingly and negotiated the terms and rates with the foreign importer on such basis. Insofar as the drawback claims which were already sanctioned and disbursed previously, direction for recovering the same would be highly inequitable, unjust and therefore, should be quashed. Insofar as the claims which are not yet passed, but show cause notice was issued for withholding such claims, the same parameters cannot be applied since from that point onwards, the petitioners could have availed of the opportunities of having the drawback rates fixed if they desired to take the benefit. Decided partly in favor of assessee. - Special Civil Application No. 8437 of 2006 - - - Dated:- 18-7-2012 - Akil Kureshi and Harsha Devani, JJ. Shri Paresh M. Dave, for the Petitioner. Ms. Amee Yajnik, for the Respondent. JUDGMENT The petitioners have challenged the order dated 21-9-2005 (Annexure I ), order dated 24-5-2004 (Annexure H ) and order dated 18-10-2002 (Annexure F ) passed by the customs authorities and the Government of India. The petition arises in following factual background. 2. The petitioner No. 1 is a partnership firm and the petitioner No. 2 is one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not availed duty drawback on talcum powder at all. They had availed of duty drawback only on packing material which was made of HDPE bottles in which the talcum powder was packed. Such drawback was available under the Drawback Schedule Entry No. 39.07. 5. The adjudicating authority, however, rejected the petitioners objections by an Order-in-Original passed on 18-10-2002. He held that the petitioners were not entitled to any drawback. He concluded that, The party has exported Talcum Powder classifying under Chapter 33. As per classification made in the General Notes on Drawback Schedule 2001-02, the Drawback on packing material is inclusive in the product itself. There is no all industry rate of Drawback admissible on Talcum Powder classified under Chapter 33 of the tariff. Hence, claim of the party for packing material under a separate heading is not admissible. He, accordingly, directed recovery of the drawback claims already sanctioned and disbursed. He also rejected the remaining claims which were pending with the Department. 6. Aggrieved by the order passed by the adjudicating authority, the petitioners preferred an appeal before the Commissioner (Appeals). Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant literature on the issue to contend that the claim of the petitioners for drawback on the packing material was fully justified. The authorities erred in rejecting such a claim. 9.1 Counsel submitted that the packing of talcum powder was an integral part of manufacturing process and that, therefore, the petitioners could legitimately claim drawback on the packing material. He submitted that the exclusion of value of packing material would not apply in the present case. 9.2 Counsel pointed out that, had the petitioners exported empty bottles, drawback on such product would have been readily granted by the Department. In the present case, the petitioners could also have applied for fixation of drawback rates for talcum powder and in which case, the Department would have also fixed appropriate rates taking into account the value of packing material also. 9.3 Counsel submitted that initial six claims were accepted and amounts of drawback were disbursed. The petitioners as exporters would, thus, fix the sale price of the product accordingly taking into account the drawback component. He, therefore, submitted that it would be harsh to now seek recovery of the claims already pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid; or (iii) on jute batching oil used in the manufacture of export goods, namely, jute (including Bimlipat jute or mesta fibre), yarn, twist, twine, thread, cords and ropes; (iv) if the said goods, being packing materials have been used in or in relation to the export of - (1) jute yarn (including Bimlipatam jute or mesta fibre), yarn, twist, twine, thread, cords and ropes in which jute yarn predominates in weight; (2) jute fabrics (including Bimlipatam jute or mesta fibre), in which jute yarn predominates in weight; (3) jute manufactures not elsewhere specified (including Bimlipatam jute or mesta fibre), in which jute yarn predominates in weight. 11.2 Rule 6 provides that where amount or rate of drawback has not been determined in respect of any goods, any manufacturer or exporter of such goods may, within specified time, apply to the Central Government for determination of amount or rate of drawback giving relevant facts. 12. The Government of India issued Notification No. 29/2001, dated 1-6-2001 providing General Notes for Drawback Rates for the year 2001-02. Note No. 3 thereof reiterated that where the export product is not specifically covered by the descript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not even the case of the respondents that had the petitioners exported only the bottles i.e. the packing material, the petitioners would not have received drawback at the rates specified in the Table to the notification specifying appropriate rate of drawback for articles made of high density polyethylene. Even the Department initially did not object to the petitioners claiming the drawback on such items and in fact, not only processed, accepted but even disbursed the drawback in their favour. On as many as six claims made on six different export consignments, such drawback was approved and disbursed. It was only later on that the Department asserted its present stand and withheld four further drawback claims. 15. The departmental authorities may have been influenced by paragraph 11 of the notification dated 1-6-2001 while clearing the petitioners initial drawback claims. The said paragraph, as noted above, permits the manufacturer/exporter to claim the drawback on individual items upon export of the composite article for which no specific rate has been provided in the Table. We are, of course, of the opinion that in the present case, the petitioners cannot be stated to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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