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TMI Blog2014 (5) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... . MBI/JCH/CCE/16/Th-II/09 dated 4-6-2013 -do- 6. MBI/JCH/CCE/20/Th-II/09 dated 4-6-2013 -do- 7. MBI/JCH/CCE/DD/41/Th-II/10-11 dated 7-6-2013 -do- 8. MBI/JCH/CCE/DD/42/Th-II/10-11 dated 7-6-2013 -do- 9. MBI/JCH/CCE/DD/07/Th-II/11-12 dated 7-6-2013 -do- 10. MBI/JCH/CCE/DD/45/Th-II/10-11 dated 7-6-2013 -do- 11. MBI/JCH/CCE/DD/34/Th-II/10-11 dated 7-6-2013 -do- 12. MBI/JCH/CCE/26/Th-II/10-11 dated 7-6-2013 -do- 13. MBI/JCH/CCE/23/Th-II/09 dated 7-6-2013 -do- 14. MBI/JCH/CCE/DD/43/Th-II/10-11 dated 7-6-2013 -do- 15. MBI/JCH/CCE/DD/01/Th-II/11-12 dated 13-6-2013 -do- 16. MBI/JCH/CCE/04/Th-II/11-12 dated 13-6-2013 -do- 17. MBI/JCH/CCE/05/Th-II/11-12 dated 13-6-2013 -do- 18. MBI/JCH/CCE/DD/02/Th-II/12-2013 dated 17-6-2013 -do- 19. MBI/JCH/CCE/01/Th-II/12-2013 dated 17-6-2013 -do- 20. MBI/JCH/CCE/DD/35/Th-II/10-11 dated 19-6-2013 -do- 21. MBI/JCH/CCE/36/Th-II/10-11 dated 19-6-2013 -do- 22. MBI/JCH/CCE/DD/05/Th-II/12-13 dated 2-7-2013 -do- 23. MBI/JCH/CCE/DD/07/Th-II/12-13 dated 2-7-2013 -do- 24. MBI/JCH/CCE/DD/08/Th-II/12-13 dated 2-7-2013 -do- 25. MBI/JCH/CCE/DD/12/Th-II/12-13 dated 2-7-2013 -do- 26. MBI/3CH/CCE/DD/10/Th-II/11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' was subsequently changed to "A blend of premium malts and purest Indian Neutral Spirits", which is a clear indication of the fact that, Grain based 'Ethyl Alcohol' was used for manufacture of whisky for export purpose, otherwise there was no need to M/s. Deejay Distilleries, Powai to change/alter the labels after the exports. (v) There is no difference in the technical specification of Grain based 'Ethyl Alcohol' as compared to Molasses based 'Ethyl Alcohol'. This aspect would have helped M/s. Deejay Distilleries, Powai in exporting grain based whisky while maintaining that, it was molasses based, purely to get undue drawback benefit. (vi) Apart from 'Indica Royale' there are few more whisky brands which are exported. None of these products have any label claiming that they are manufactured using molasses based 'Ethyl Alcohol'. Hence, even these could have been made out of grain based 'Ethyl Alcohol'. (vii) It is not clear as to whether whisky exported was exclusively made from 'Ethyl Alcohol', which was based on Molasses or it was manufactured from Ethyl Alcohol generated from Grain based. 2.1 Being aggrieved by the said Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawback claims covered in first round of revisionary proceedings as contained in case mentioned at Sl. No. (l) of table above, the respondent also filed some fresh applications for fixation of brand rate of drawback in respect of IMFL manufactured and exported them subsequently. These applications for fixation of drawback brand rate on the portion representing ENA/Ethyl Alcohol were rejected by the original authority vide Orders-in-Original/Letters mentioned at Sr. Nos. 2 to 28 of the table above. The original authority held that batch no. was not found on the export documents and also observed that jurisdictional central excise authorities in their verification report have heavily relied upon certificate issued by the state excise's inspector; that the certificate does not contain the basis i.e. documents/records, on the basis of which the certificates were issued and that in absence of details of records/documents leading to conclusion, the certificates do not have evidential value. 3. Being aggrieved by the impugned Orders-in-Original, the respondents party filed appeals before Commissioner (Appeals) who decided all the appeals in favour of respondents vide impugned orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for his approval before use." Taking into account all the strict conditions of Bombay Prohibition Act, 1949, the contention of M/s. Deejay Distilleries that the 'Grain based Ethyl Alcohol' was used only for domestic clearances and not for export purpose is not acceptable. Moreover, certain labels of exported product has sufficient indication of the fact the 'Grain based Ethyl Alcohol' was used in its production and the contention of M/s. Deejay Distilleries that it is just a marketing gimmick cannot be accepted. 4.4 The Commissioner (Appeals) has erred in relying on the certificate given by the lower authority of State Excise certifying that 'Grain based Ethyl Alcohol' was never used for exportation of goods, as the export consignments were never monitored/inspected by the State Excise Department. The State Excise officer has never produced any manufacturing date or details in respect of ingredients used in the products exported. Hence, the State Excise certificate that only 'Molasses based Ethyl Alcohol' was used and 'Grain based Ethyl Alcohol' was never used in the products exported cannot be accepted. 4.5 The Commissioner (Appeals) has failed to consider that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9DD of the Customs Act, 1962 to file their counter reply. The respondent vide their letter dated 30-4-2014 & 7-5-2013 made the following submissions : 5.1 Department had objected that Commissioner has relied upon Purchase order of foreign buyer but not on the usage of Actual Ethyl Alcohol in the exported goods. The fact of actual use was verified from the manufacturing records maintained as per the Bombay Prohibition Act in Registers/Forms PL/VIII/VII/VI/I & II. As per the order of JS (Review) Government of India Para 12 the production and clearance of IMFL from Grain based is also verified from the above records. It is observed from the records that the IMFL manufactured from grain based alcohol is cleared for domestic consumption in India. While IMFL manufactured from Molasses based alcohol is exported as well as cleared for domestic consumption in India. 5.2 It is contended by the department that the exporter has not proved that molasses based ethyl alcohol was used in manufacture of exported IMFL. The verification of the records has been carried out as mentioned in Point 4.1 as above the IMFL manufactured from Grain based alcohol is not exported. Whatever IMFL expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcohol for export of IMFL is not free from doubt. As per the above points the State Excise Statutory records particularly Register/Forms PL/VIII/VII/VI/I & II that IMFL exported is manufactured from Molasses based Alcohol only. 5.7 The department has contended that in the cases of Raigad and Goa Commissionerate referred by Commissioner of Appeals does not mention about procurement of Ethyl Alcohol whether Molasses or Grain based. As per State Excise Statutory records particularly Register/Forms PL/VIII/VII/VI/I and II that IMFL exported is manufactured from Molasses based alcohol only. The above facts have already been discussed in para 4.1 to 4.9. 5.8 It is contended by the department that exporter has not proved that molasses based ethyl alcohol is used for IMFL exported. As per State Excise Statutory records particularly Registers/Forms PL/VIII/VII/VI/I & II that IMFL exported is manufactured from Molasses based Alcohol only." 5.9 As directed the samples of IMFL exported was drawn and sent for testing to UDCT, Mumbai for testing. The result of Dr. S.T. Mhaske, PHD (Tech.), Department of Paint & Polymer Engineering Technology, University institute of Chemical Te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s proceedings, vide Order-in-Original No. 12/AK/DBK/Th-II/2013, dated 14-2-2013, [Order-in-Original mentioned at Sr. No. (l) of the table] again rejected the application for brand rate fixation on the ground that batch no. was not found on the export documents, and the jurisdictional central excise authorities in their verification reports heavily relied upon certificate issued by the State excise's inspector; which does not contain the basis i.e. documents/records, on the basis of which the certificates were issued. Apart from drawback claims covered in first round of proceedings as contained in case mentioned at Sl. No. (l) of table above, the respondent also filed some fresh applications for fixation of brand rate of drawback in respect of IMFL manufactured by them. The fresh applications for fixation of drawback on the portion representing ENA/Ethyl Alcohol were also rejected by the original authority vide Orders-in-Original/Letters mentioned at Sr. No. 2 to 28 of the table above on the same grounds. Being aggrieved by the impugned Orders-in-Original the respondents filed appeals before Commissioner (Appeals) who decided all the appeals in favour of respondents vide impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL II. 2. One of the main objections while filing the appeal was that in one Brand i.e. Indian Royale Malt Whisky, on label a phrase "Blend of Premium Malts and Purest Indian Grain Spirits" was written. The department had raised objection that the said IMFL was manufactured from Grain based Alcohol. From the above list of batch wise production at Exhibit XXVIII a separate list of batches manufactured of brand Indian Royale is prepared, and it is verified from PL VIII/VII/VI/V/I & II from register. It is observed from the records all these batches are manufactured from Molasses based Alcohol. From the PL II form i.e. Batch Card it is observed that nearly 1% of Malt Spirit is added for flavour as explained in the first Para of the verification report. 17. It may, therefore, be appreciated that the appellants have been maintaining elaborate Statutory Records in the form of various registers/Forms PL-I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII (details as per Exhibit-I to the above verification report) prescribed under State Excise Rules & Regulations. It is also to be kept in mind that the raw materials (Molasses/ENA) and finishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by State Excise authorities and then categorically stated that IMFL manufactured from grain based Ethyl Alcohol is cleared for domestic consumption in India while IMFL manufactured from Molasses based alcohol is exported as well as cleared for domestic consumption. It was further stated in the report that no IMFL of grain based alcohol is exported and only IMFL manufactured from Molasses based alcohol is exported. The said verification report clearly established that, IMFL manufactured from molasses based Ethyl Alcohol was only exported. This verification report is a valid evidence and original authority has not revealed any justified reason to reject the same. There was no issue of mentioning batch numbers in export documents when the brand rate fixation applications were rejected initially. The original authority has not pointed out anything in the verification report which suggested the use of grain based ethyl alcohol in the manufacture of IMFL exported. Government finds that the Superintendent Central Excise has verified batch wise particulars of IMFL produced and backward linkage was done by tracing batch numbers, and by also verifying batch card wise production. Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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