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TMI Blog2013 (8) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... d in all these revision applications, they are taken up together for decision by this common order. 2. Brief facts of these cases are as under : 2.1 RA No. 371/10/DBK/11 M/s. Dulichand Narender Kumar Exports Pvt. Ltd. Brief facts of the case are that applicant a merchant exporter imported raw material under DFCE Scheme vide Notification No. 53/2003-Cus., dated 1-4-2003 and got their finished goods i.e. PP woven sacks/fabrics, manufactured from M/s. Marvel Industries, MIDC Malegaon, Sinnar. They are engaged in export of polypropylene woven fabrics, polypropylene sacks/fabrics in cut pieces under bond in terms of Rule 19 of Central Excise Rules, 2002. They filed an application No. DCNK/DBK/08-09/006, dated 19-1-2009 for fixation of drawback (brand rate) under Rule 6(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. On scrutiny of application, it is seen that the applicant has imported 192.5 MTs. of PP Granule valued Rs. 1,72,92,671/- and utilized 83,992.50 kgs. for manufacture of finished goods which were exported under 5 shipping bills covered by aforesaid drawback claim. It is also seen that value addition in respect of above application was (-) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since in respect of above three applications, the value of goods exported was less than the value of raw materials imported, show cause notice dated 16-7-2009 was issued. After following due process of law the adjudicating authority rejected the said brand fixation applications. 2.3 RA No. 371/54/DBK/11-Cus. M/s. KN Resources Pvt. Ltd., Nashik The applicant a merchant exporter imported raw material under DFCE Scheme vide Notification No. 53/2003-Cus., dated 1-4-2003 and got their finished goods i.e. PP Woven sacks/fabrics, manufactured from M/s. Marvel Industries, MIDC Malegaon, Sinnar. They filed an application No. KN/DBK/09-10/003 dated 14-7-2009 for fixation of drawback (brand rate) under Rule 6(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. On scrutiny of application, it is seen that the applicant has imported 14,455 kgs. of woven polypropylene fabrics in cut pieces valued Rs. 16,67,655/- under Bill of Entry No. 844378 dated 5-4-2009 and utilized same for manufacture of finished goods which were exported under shipping bill No. 7272939 dated 21-4-2009 having FOB value of Rs. 14,35,726/- covered by aforesaid drawback claim. It is seen that v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Commissioner Appeals. Hence all the documents were available with the Commissioner Appeals still he rejected the appeal without application of mind and put the applicant at loss. 4.3 Commissioner (Appeals) have travelled beyond show cause notice where there was no issue of assessment of Bill of Entry. The issue raised in show cause notice was that there is negative NFE considering assessable value as per Bill of Entry as against CIF value of imports made by the applicant and subsequently paid the same amount. 4.4 They relied upon the decision in case of M/s. Oracle Infotech (P) Ltd. v. CCE, New Delhi - 2003 (151) E.L.T. 656 (Tri.-Del.) which deals with concept of value addition at the time of exports. A value addition is difference between FOB value of exports minus CIF value of imports. There is no dispute that CIF value of import against the revised/renegotiated invoice is only the Foreign Exchange Outgo of the said consignment. Commissioner (Appeals) wrongly conceived as assessable value as per Bill of Entry is the Foreign Exchange Outgo of the said import while calculating value addition. There was no question of disputing the assessment made against the said Bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and hence the revised applications need to be considered along with the payment made against the said Bill of Entry and not the value shown in the Bill of Entry for the reasons mentioned in the fact. 4.10 The applicant gives below once again the working of value addition considering the revised price of the imported inputs which was the sole consideration paid through banking channel and there is no outstanding amount to be paid to the overseas suppliers as herein above explained and once again detailed herein below : (i) The original import price of inputs was US$1818 per MT at the time of import vide Bill of Entry No. 674299 dated 7-11-2008, original Invoice No. 7069785-1 dated 20-10-2008 of the overseas supplier M/s. Vinmar International Ltd. The payment terms was Letter of Credit with 90 days credit. There was no economic slowdown or any recession problem in the world. (ii) After the actual import was done, subsequently in view of the economic slow down worldwide, the prices of all the products fell substantially low and our business was badly hit. As a result, the applicant renegotiated with the overseas supplier once again to reduce th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein. 4.12 The applicant w.r.t. sub-rule (2) of the Rule 16A of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 would like to submit that if the export realization is less than the FOB value of exports, accordingly reduced drawback is sanctioned or recovered from the exporters. When there is a reduction in export realization of prices for sanctioning drawback, the same logic should also be applied for calculation of value addition considering the actual amount of imported inputs paid through banking channels and there is no consideration further payable by the importer. 4.13 Under the Drawback Scheme, it is imperative to be noted that if any inputs are used for manufacture of export products and such inputs used suffers any incidence of duty, such duty paid on such inputs are drawn back. It is the fact that the applicant paid the customs duty on the imported inputs used to manufacture of goods by debiting the said duty to DFCE licenses, export the goods manufactured and the present application is for fixation of drawback of the duty paid on inputs used for manufacture of goods exported. In view of these basic provisions and the circumstances beyond the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there are sufficient cause for condonation of said delays. As such, Government condones the said delays. 8. Government notes that in case of order-in-appeal No. AKP/315/ NSK/10, dated 16-12-2010 the applicant submits that they imported inputs along with "plates" and cost of said "plates" was shown separately in invoice as "miscellaneous charges" and cost of plates was reimbursed by the suppliers and in case of other orders-in-appeal No. AKP/309/NSK/10, dated 13-12-2010 and AKP/306/NSK/10, dated 30-11-2010 the applicants imported raw materials i.e. PP granules/woven sacks/fabrics under DFCE Scheme vide Notification No. 53/2003-Cus., dated 1-4-2003 and after getting the goods manufactured, exported the same and claim of drawback. Their application for fixation of brand rate of drawback under Rule 6 ibid was rejected on the ground that export value was less than the value of imported materials. Applicants are claiming that due to worldwide economic recession, the prices of said imported material had fallen sharply. They re-negotiated the prices with foreign supplier who finally revised the prices downwards. They have made the payment at the revised re-negotiated prices of imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or rate of drawback shall be determined. It is admitted fact on the part of the applicant that value of exported goods as per shipping bills covered by the applications is less than CIF value of imported goods as shown in the Bill of Entry. Hence, as per above Rule 8(2) rate of drawback cannot be determined. 10. Applicant has contended that their revised applications of respective dates for fixation of drawback brand rate may be considered. In this regard, Government notes that as per Rule 6(1)(a) of Drawback Rules, 1995, exporter is required to file brand rate fixation application within 60 days from the date of export of goods. A delay of 30 days can be condoned by the jurisdictional Commissioner. The original applications were filed in time. The CIF value of imported materials as per invoice and relevant Bill of Entry assessed by Customs is to be taken into account for the purpose of working out value addition in the export goods. The CIF value assessed in Bill of Entry were not reassessed by competent assessing authority. Therefore the CIF value as assessed by customs has to be taken as value of imports. The C.B.E. & C. Circular No. 14/2003-Cus., dated 6-3-2003 also prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the plain reading of statute as clarified and elaborated vide the C.B.E. & C. Manual and circulars are mandatorily binding on the departmental authorities. Further, Hon'ble Supreme Court in case of M/s. Indian Aluminium Co. - 1991 (55) E.L.T. 454 (S.C.) and Hon'ble Tribunal in case of M/s. Avis Electronics has observed that when provisions are stipulated for doing a particular act in a specific manner then it would mean that any deviation therefrom is not permitted at all and it should be performed in that manner itself as per Rules. 13. In view of above, Government finds that for the purpose of applicable Rule 8(2) of Drawback Rules, the formula to ascertain value addition as provided under Board Circular No. 14/2003-Cus., dated 6-3-2003, the value as per impugned Bill of Entry and Shipping Bill are to be necessarily taken into consideration. Any subsequent negotiations or re-settlement of prices to be paid especifically when the applicant herein has paid the duties at the time of imports through DFCE licence cannot override the statutory provisions as detailed above. 14. Government therefore considers the above requirement of Rules/ Circulars as substantial requirement of law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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