9911796707
TMI Blog2014 (9) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. - Writ Petition No. 1098 of 2013 - - - Dated:- 1-9-2014 - S. C. Dharmadhikari And B. P. Colabawalla,JJ. For the Appellant : Mr. V. Sridharan, Sr. Counsel And Mr. Prakash Shah i/b M/s. PDS Legal for Petitioner For the Respondent : Mr. Pradeep S. Jetly Mr. J. B. Mishra And Mr. S. P. Bharati JUDGMENT [ Per B. P. Colabawalla J. ] :- 1. Rule. The Respondents waive service. By consent of parties, Rule made returnable forthwith and heard finally. 2. This Petition under Article 226 of the Constitution of India seeks quashing of the Circular dated 30th December, 2011 issued by the Central Board of Excise and Customs, New Delhi (CBEC), to the extent that it purports to clarify that an exporter cannot claim the Brand Rate of drawback under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (hereinafter referred to as the Drawback Rules ), after having availed of the All Industry Rate of drawback under Rule 3. As a consequence of this, the Petitioner has also challenged the Order-in-Appeal dated 27th September, 2012 passed by the Commissioner of Central Excise (Appeals)-(Respondent No.3) and the orders / letters dated 19th April, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing high prerogative writs when alternate remedies are available, are self-imposed by the Courts and there is no absolute bar in exercising writ jurisdiction merely because an alternate remedy is available, if the facts so warrant. In the present case, the facts are really undisputed. The entire controversy revolves around the interpretation of Rule 3 vis-a-vis Rule 7 of the Drawback Rules and whether the CBEC Circular dated 30th December, 2011 has gone beyond or whittled down the Drawback Rules. In these circumstances, we are inclined to exercise our discretion and entertain this Writ Petition on merits, especially in view of the fact that challenge has been laid to the said Circular and the issues raised herein are purely legal, and more so when there are no disputed questions of fact. We therefore do not think it fit or necessary to put the Petitioner through the mill of statutory appeals / revisions in the hierarchy of the Customs Act, 1962. We also find force in the argument of Mr Sridharan, the learned senior counsel appearing on behalf of the Petitioner, that in the peculiar facts and circumstances of the present case, availing of the alternate remedy would be an exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notified under Rule 3 is less than 4/5th (80%) of the actual duties suffered on the inputs. 7. This modus operandi was being followed by the Petitioner for a long period of time and the Revenue was accepting the Petitioner's applications under Rule 7 even after they had claimed drawback at the All Industry Rate under Rule 3. After verification and scrutiny of the said applications, the Respondents have in the past sanctioned the Brand Rate of drawback under Rule 7 after deducting the drawback already granted / disbursed under Rule 3. This is not disputed by the Respondents. 8. As per the said practice and following the same procedure, the Petitioner, during the period May 2011 and May 2012, after export of the finished goods, obtained drawback under Rule 3. Thereafter, the Petitioner filed applications under Rule 7 seeking determination of the Brand Rate of drawback, the details of which are set out in paragraph 10 of the Writ Petition. However, deviating from its long standing practice, the Revenue for the first time sought to reject the applications filed by the Petitioner under Rule 7 of the Drawback Rules on the ground that the Petitioner had already claimed drawbac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itory of India were not put at a disadvantage and remained competitive in an otherwise fiercely competitive international market. 12. The further submission of Mr. Sridharan was that on a conjoint reading of the Drawback Rules and especially Rules 3 and 7 thereof, there was no provision which barred an exporter from seeking determination of the Brand Rate of drawback under Rule 7, merely because the exporter, at the time of export of the goods, had claimed / was granted drawback at the All Industry Rate as notified under Rule 3. He submitted that there being no such prohibition in the Rules, the Circular dated 30th December 2011, and in particular, paragraph (d) thereof was ultra vires the Rules and Act. The Circular seeks to impose a prohibition in seeking determination of the Brand Rate of drawback under Rule 7, when drawback at All Industry Rate has been claimed and granted under Rule 3. No such prohibition can be spelt out from the Rules or the Act, is the submission. For all the aforesaid reasons, Mr. Sridharan submitted that the Circular dated 30th December 2011, and in particular, paragraph (d) thereof, was required to be struck down by this Court under Article 226 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the Respondents as well as the relevant provisions of the Drawback Rules and the Act. Section 75(1) of the Customs Act, 1962 inter alia provides for drawback on imported materials used in the manufacture of goods which are exported and stipulates that subject to the other conditions set out therein, where it appears to the Central Government that in respect of goods of any class or description, manufactured, processed or on which any operation has been carried out in India, being goods which have been entered for exports, a drawback would be allowed of customs duties chargeable under the Act on any imported materials of a class or description, used in the manufacture, or processing, or carrying on any operation on such goods, in accordance with, and subject to the Rules notified by the Central Government in that behalf and made under subsection (2). 16. Section 75(2) inter alia stipulates that the Central Government may make Rules for the purpose of carrying out the provisions of sub-section (1) and in particular such Rules may provide for:- (i) the payment of drawback of the amount of duty actually paid on the imported materials etc.; (ii) specifying the goods in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be determined by the Central Government; Provided that where any goods are produced or manufactured from imported materials or excisable materials or by using any taxable services as input services, on some of which only the duty or tax chargeable thereon has been paid and not on the rest, or only a part of the duty or tax chargeable has been paid, or the duty or tax paid has been rebated or refunded in whole or in part or given as credit, under any of the provisions of the Customs Act, 1962 (52 of 1962) and the rules made thereunder, or of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, or of the Finance Act, 1994 (32 of 1994) and the rules made thereunder, the drawback admissible on the said goods shall be reduced taking into account the lesser duty or tax paid or the rebate, refund or credit obtained; Provided further that no drawback shall be allowed - (i) if the said goods, except tea chests used as packing material for export of blended tea, have been taken into use after manufacture; (ii) if the said goods are produced or manufactured, using imported materials or excisable materials or taxable services in respect of which duties or taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Government after an assessment of average incidence of customs and central excise duties suffered on inputs/input services utilized in the manufacture of the said exported products. This facility is generally availed of by the exporters as no proof of actual duties suffered on the inputs/input services used, is required to be produced. After the announcement of the Budget, various Export Promotion Councils / Associations are consulted and their suggestions as well as their requests and justifications for suitable enhancement of rates and also any changes sought in the scheme of the Drawback Table or the entries therein, are taken note of whilst finalizing and announcing the new All Industry Rates and which generally are fixed as a percentage of the FOB price of the exported goods. Thereafter, the new All Industry Rate of drawbacks are notified every year after factoring in the changes in duty rates effected by the Budget. This is generally the procedure followed whilst arriving at the All Industry Rate and at which rate the exporter can claim drawback under Rule 3. It is for this reason that Rule 3 provides that subject to the provisions of (a) the Customs Act, 1962 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application within the aforesaid time, allow such manufacturer or exporter to make such application within a further period of thirty days; (2) On receipt of the application referred to in sub-rule (1), the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, may, after making or causing to be made such inquiry as it deems fit, allow payment of drawback to such exporter at such amount or at such rate as may be determined to be appropriate, if the amount or rate of drawback determined under rule 3 or, as the cased may be revised under rule 4, is in fact less than four-fifth of such amount or rate determined under this sub-rule. (3) Where an manufacturer or exporter desires that he may be granted drawback provisionally, he may, while making an application under subrule (1), apply to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, in writing in this behalf in the manner as has been provided in clause (a) of sub-rule (2) of rule 6 for the applications made under that rule and the grant of provisional drawback shall be considered in the manner and subject to the conditions s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase may be, revised under Rule 4, and the Brand Rate of drawback determined by Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case maybe, under Rule 7(2). The grant of provisional drawback would then be considered in the manner and subject to the conditions specified in clauses (b) and (c) of sub-rules (2) and (3) of Rule 6. 23. On a careful and conjoint reading of the aforesaid Rules, we do not find that there is any prohibition set out in the Drawback Rules which debars an exporter from seeking determination of the Brand Rate of drawback under Rule 7, merely because at the time of export, he had already claimed the All Industry Rate of drawback under Rule 3. In fact, to our mind, the Rules seem to suggest otherwise. Firstly, Rule 3 which deals with drawback , itself stipulates when drawback is not to be allowed [see second proviso to Rule 3(1)]. Despite specifying certain situations when drawback is not be allowed, we do not find any provision specified therein barring an exporter from seeking a determination of the Brand Rate of drawback under Rule 7, merely because, at the time of export, he applied for the grant of the All Industry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Jetly. If we were to accept the submission of the Revenue, that once an exporter or a manufacturer was to apply for drawback at the All Industry Rate under Rule 3, he would be debarred from seeking determination of the Brand Rate of drawback under Rule 7, then no exporter at the first instance, would ever apply for drawback at the All Industry Rate determined under Rule 3, and would always apply under Rule 7(1) for seeking determination of the Brand Rate of drawback, alongwith an application under Rule 7(3) for the grant of provisional duty drawback at the All Industry Rate as determined under Rule 3. This could not have been the intention of the Legislature or the Central government at the time of bringing into force the Drawback Rules. There is nothing else that has been brought to our notice, either in the Customs Act, 1962 or the Drawback Rules, that could even impliedly spell out the prohibition as sought to be contended by Mr. Jetly. We therefore hold that the manufacturer or exporter is not barred from seeking a determination of the Brand Rate of drawback under Rule 7 merely because, at the time of export, he had applied for and granted drawback at the All Industry Rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shipping Bill to be brought back into drawback queue for payment of Brand Rate. (d) Thus, provisions do not provide that an exporter can avail the AIR Drawback first at the time of export under specified sub serial / tariff item number of the AIR schedule and then file for determination of the Brand Rate under Rule 7. Exporter's declaration of tariff item number other than 9801 on the Shipping bill is declaration that he is satisfied with the AIR rate and opts for it. Any other interpretation would also undermine the entire EDI procedure in this respect. 26. On reading the Circular, and particularly paragraph (d) thereof, it is clear that the Circular seeks to interpret the Rules to mean that an exporter once having availed the All Industry Rate of drawback at the time of export, cannot file an application for determination of the Brand Rate of drawback under Rule 7. As discussed earlier, on a plain reading of the Drawback Rules, we do not find any such prohibition as is sought to be culled out by the CBEC in its Circular dated 30th December, 2011. The CBEC whilst clarifying the said Drawback Rules, has imposed limitations / restrictions which are clearly not provided fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
