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TMI Blog2014 (12) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, they require a high grade steel as input and consequently the value of the same would also be very high. Therefore, “Flanges” cannot be compared with other produces as mentioned in SS No. 73.29/73.28 as the value of the materials used for production of Flanges and the production of other goods/class of goods would be different and would vary substantially. Therefore, if the contention of the petitioners is accepted that the petitioners shall be entitled to All Industry Duty Drawback at the rate of ₹ 19 per Kg. under SS No. 73.29 at par with other products as mentioned in SS No. 73.29, in that case, as the petitioners had used low grade steel as input in the manufacture of Flanges and the value of which is very low, the petitioners shall be getting duty drawback at the higher amount i.e. ₹ 19 per Kg. which is not permissible. Right from the beginning and when the Notification No. 33 was issued, as such there is no mention with respect to Flanges in the SS No. 73.29. As such, as the controversy had arisen whether on manufacture of export of “Flanges” duty drawback at the rate of ₹ 19 per Kg. under SS No. 73.29 is available or not, the aforesaid c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the petitioner also maintains separate register for the input used in the manufacture of final product which is ultimately exported. That appropriate declarations in the said regard are also made in the application for removal of export product. It is the case on behalf of the petitioner that the petitioner has been submitting application in Form ARE-1 in which the petitioner declared that the petitioner is not availing Cenvat credit. According to the petitioner, clearance of export goods was against the claim of duty drawback. 3.2 That the petitioner exported goods during the period between 5-2-2003 and 28-3-2003 (for the year 2002-2003) and for the period between 4-4-2003 and 5-4-2003 (for the year 2003-2004) by 45 different Shipping Bills. That the petitioner has claimed duty drawback on the aforesaid export on the basis of All Industry Rates of duty drawback. According to the petitioner, All Industry Rates of duty drawback for the year 2002-2003 was governed by Notification No. 33/2002-Customs (N.T.), dated 29-5-2002 as amended by Notification No. 80/2/Customs (N.T.), dated 10-12-2002. The relevant entry in the notification was under Heading No. 73.29. That so far as fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wback on export of Flanges, the petitioner preferred appeal before the Commissioner of Customs (Appeals), Rajkot. It is the case on behalf of the petitioner that in the appeal the petitioner pointed out that All Industry Rates of Duty Drawback for the year 2002-2003 was covered by Notification No. 33 of 2002, dated 29-5-2002. That the said notification was amended by notification dated 10-12-2002 and in the amended notification, condition of use of imported steel in the manufacture of goods was removed. It is the case on behalf of the petitioner that in other words, by the amended notification dated 10-12-2002, the requirement to use the imported material in the final product was removed and therefore, the petitioner was not required to use imported raw material. The petitioner, therefore, submitted before the first appellate authority that exports covered by 45 shipping bills which are subject matter of the present petition were made in this period when the amended notification dated 10-12-2002 was in operation. According to the petitioner, thereafter the Board issued Notification dated 25-6-2003 which was made effective from 1-7-2003 under which Entry Nos. 73.28, 73.29, 73.30 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1 Mr. Paresh Dave, learned advocate appearing on behalf of the respective petitioners has further submitted that while deciding the revision application, the revisional authority has not properly appreciated and considered the fixation of All Industry Rates of Drawback and subsequent clarificatory Circulars issued by the Department. 4.2 Mr. Paresh Dave, learned advocate appearing on behalf of the respective petitioners has further submitted that as such all Forgings i.e. all products manufactured through forging process were covered under S.S. No. 73.29. It is submitted that the goods manufactured by the petitioners were also manufactured through Forgings as certified and confirmed by the IIT vide report dated 11-3-2003. The said goods were also covered under S.S. No. 73.29 and accordingly All Industry Rates of Drawback at ₹ 19 per kilogram was admissible to the petitioners. 4.3 Mr. Paresh Dave, learned advocate appearing on behalf of the respective petitioners has further submitted that the revisional authority has denied All Industry Rates of Drawback to the petitioners on the ground that the goods manufactured and exported by the petitioners were Flanges , whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fered on imported or indigenous inputs used. In support of his above submission, he has relied upon the Circular No. 24/2001-Cus., dated 20-4-2001 as well as decision of the Hon ble Supreme Court in the case of Chemicals Fibres of India Ltd. v. Union of India, reported in 1991 (54) E.L.T. 3 (S.C.), more particularly para 8 of the said decision. No other submissions have been made. Making above submissions and relying upon above decisions, it is requested to allow both these Special Civil Applications and quash and set aside the impugned orders passed by the revisional authority and restore the orders passed by the Commissioner (Appeals) by holding that the petitioners are entitled to All Industry Rates at the rate of ₹ 19 per Kg. on the aforesaid goods exported by the petitioners during the period under consideration for the relevant shipping bills. 5. Both these appeals are opposed by Ms. Amee Yajnik, learned advocate appearing on behalf of the respondent Nos. 2 and 3. It is submitted that in the facts and circumstances of the case the impugned common order passed by the revisional authority is absolutely in consonance with the respective notifications and as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the petitioners are not entitled to duty drawback. 5.2 It is further submitted that reasoned and speaking order has been passed by the revisional authority dealing with all the contentions/submissions made by the petitioners. It is submitted that as has been found that the petitioners were not entitled to the duty drawback as per All Industry Rates under Heading SS Nos. 73.28/73.29, no error has been committed by the revisional authority in quashing and setting aside the order passed by the Commissioner (Appeals) and in denying All Industry Rates of Duty Drawback at the rate of ₹ 19 per Kg. on exports of goods Flanges by the respective petitioners. By making above submissions, it is requested to dismiss both these Special Civil Applications. 6. Heard the learned advocates appearing on behalf of the respective parties at length. 6.1 At the outset, it is required to be noted that the petitioners are claiming All Industry Duty Drawback on export of goods - Flanges at the rate of ₹ 19/- per Kg. as per SS No. 73.29 under Chapter No. 73 of Export Notification No. 33 of 2002, during the period between 5-2-2003 and 28-3-2003 (for the year 2002-2003) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, short question which is posed for consideration of this Court is whether on export of the product Flanges , the petitioners shall be entitled to duty drawback on All Industry Drawback Rates at the rate of ₹ 19 per Kg. on Steel content as provided under SS No. 73.29?. While considering the aforesaid question, the relevant provisions of Customs and Central Excise Duty Drawback Rules, 1995 deserve consideration. Rule 2(a) defines Drawback . Rule 2(a) reads as under : 2(a). drawback , in relation to any goods manufactured in India, and exported, means the rebate of duty chargeable on any imported materials or excisable materials used in the manufacture of such goods; 6.3 Rule 3 provides for rates of duty drawback and as per Rule 3 subject to the provisions of the Customs Act, 1962 and the Rules made thereunder; Central Excise Act and the Rules made thereunder and Duty Drawback Rules, 1995, a drawback may be allowed on the export of goods at such amounts or at such rates, as may be determined by the Central Government. (All Industry Duty Drawback Rates determined by the Central Government). As per sub-rule (2) of Rule 3, while determining the amount of rate of drawb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h class or description of the materials from which a particular class of goods is ordinarily produced or manufactured in India; (b) the average quantity or value of the imported materials or excisable materials used for production or manufacture in India of a particular class of goods; (c) the average amount of duties paid on imported materials or excisable materials used in the manufacture of semis, components and intermediate products which are used in the manufacture of goods; (d) the average amount of duties paid on materials wasted in the process of manufacture and catalytic agents; Provided that if any such waste or catalytic agent is re-used in any process of manufacture or is sold, the average amount of duties on the waste or catalytic agent re-used or sold shall also be deducted; (e) the average amount of duties paid on imported materials or excisable materials used for containing or, packing the export goods; (f) any other information which the Central Government may consider relevant or useful for the purpose. 6.4 Thus, while determining the rates of duty drawback - All Industry Duty Drawback Rates, Central Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of ₹ 19 per Kg. under SS No. 73.29 at par with other products as mentioned in SS No. 73.29, in that case, as the petitioners had used low grade steel as input in the manufacture of Flanges and the value of which is very low, the petitioners shall be getting duty drawback at the higher amount i.e. ₹ 19 per Kg. which is not permissible. As stated above, as such no data was available with the Central Government with regard to Flanges as the same was not provided by the Forging Panel of Engineering Export Promotion Council regarding Flanges. Under the circumstances when no data regarding Flanges was available with the Central Government with respect to requirement as per sub-rule (2) of Rule 3, inter alia it was not possible for the Central Government to determine the amount of rate of drawback under Rule 3. Under the circumstances, on the aforesaid ground, the petitioners are rightly denied All Industry Duty Drawback as claimed by them at the rate of ₹ 19 per Kg. on steel contents. 6.5 At this stage, it is required to be noted that even with respect to the goods covered under SS Nos. 73.28, 73.29, 73.30 and 73.31, it was found that the said entries were be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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