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TMI Blog2016 (7) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... along with Ill A statements, copies of shipping bills and invoices of inputs, for fixation of brand rate of duty drawback under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules 1995 on the basis of incidence of duty paid on the inputs used in the manufacture of impugned goods. The applicants have claimed the duty drawback on duty paid on inputs namely whiskey concentrate/raw distillate, glass bottles, P.P. caps, corrugated boxes/cartons and molasses. The drawback sanctioning authority fixed the brand rates in all these four cases vide Order No. VIII/48/Tech/DBK/ NIC/66/08/358 dated 20.04.2012, V111/48/Tech/DBK/NIC/31/09/354 dated 20.04.2012, dated 20.04.2012 and dated 11.04.2012 but disallowed drawback on the declared input molasses on following two grounds: (i) As per proviso (ii) to Rule 3 of the Drawback Rules, no drawback is allowable on the excisable materials in respect of which duties or taxes have not been paid and applicant have not provided evidence of direct duty payment on molasses. (ii) The applicants have been procuring Extra Neutral Alcohol (ENA) and not the molasses. Also no evidence of duty payment on ENA has been submitted. 3. Being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacture of ENA. That payment of appropriate duty on molasses is not in dispute and therefore rejection of claim on molasses in fixation of brand rate is not correct. 4.3. That the Commissioner (Appeals) as well as the competent authority fixing the brand rate have also failed to take into cognizance of the fact that supply of molasses to the distilleries is under the strict supervision of the State Excise Authorities exercising control over the manufacture and sale of liquor whether for domestic consumption or export. That the appellate authority has taken erroneous view in the matter leading to denial of correct brand rate fixation. 4.4. That the department has not specified the provisions of law, which provide that drawback claim under Section 75 of the Customs Act, 1962 cannot be allowed unless, it is established that export goods were manufactured or produced out of excisable goods. That in the present case, All Industrial Rates of Drawback on ENA had been determined by the Central Government under Section 75 (2) of the Customs Act, 1962, Section 37(2) of the Central Excise Act, 1944 and Section 93 A (2) of the Finance Act, 1994. That provisions of the laws do not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es paid on these inputs remains unrelieved as the finished products are not subject to Central Excise Levy. That taking into account the law laid down in the board circular no. 83/2003-Cus , the All Industrial Rates fixed for ENA should have been taken into account while computing the brand rates on various brands of whisky/brandy as the Central Excise Duties paid on the inputs (molasses) used in the manufacture of ENA remains unrelieved as ENA is not subject to Central Excise Levy. 4.7. That the appellate authority rejected the appeal on the ground that the applicant have failed to produce the evidence of actual consumption of ENA in the manufacture of export products which is factually is incorrect in as much as extra neutral alcohol is the basic raw material without which the export products cannot be manufactured. 4.8. That the appellate authority has erred in arriving to conclusion that the applicant in their drawback application had neither declared ENA as one of their input nor have shown receipt. That the applicant had declared molasses as one of the input for manufacture of ENA, then the question of misstating the facts of receipt of stock and consumption norms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of each and every consignment duly verified on its receipt in the factory and properly accounted for in the stator books of accounts maintained under the authority of the State Excise Department and invariable return of one copy of invoice in token of receipt and accounted of goods in their records. 5.3. That the norm of consumption quantity of ENA used in the manufacture of final product they are maintaining a proper record of issue of the ENA used as an input and final product the liquor showing the recovery percentage of liquor from ENA. The applicant submitted the detailed chart of all invoice showing particulars of the ENA and its strength in terms of V/V 94.5% and details of shipping bill wise export pertaining to the period in question. 5.4. That the applicant is in possession of all the invoices showing strength of the ENA purchased, therefore is eligible for all industry rate of drawback claimed and impugned order deserves to be set aside. 6. Government has carefully gone through the relevant case records and perused the impugned Orders-in-Original and Orders-in-Appeal. 7. On perusal of case records, Government observes that the applicant engaged in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 and the rules made there under, or of the Central Excise Act, 1944 and the rules made there under, or of the Finance Act, 1994 and the rules made there under, 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 allowed. Provisio (ii) to Rule 3 lays downs that no drawback shall be allowed if the said goods are produced or manufactured using material in respect of which duties have not been paid. 9. Further Government observes that the applicants are required to file drawback statement 1,11,111, Ill-A giving thereunder details of inputs used and incidence of duty paid thereon. In drawback-I statement the applicant had claimed duty drawback on input molasses. As per Note 5 of this statement only those raw materials/components etc are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing payment of Central Excise Duty are required to be attached. ln DBK-III(A) statement they are to furnish documents relating to payment of Central Excise duty on stocks of indigenous material lying with them from the date, three months prior to the date of first shipment. As such the brand rate of duty drawback are computable on the basis of actual duty payment on the inputs used for manufacture of export goods which is to be verified from the original duty paying documents. However, in the present case the applicants have not furnished any such document in respect of their input molasses and have admitted that they have not even procured declared input i.e. molasses on which they had claimed duty drawback. The applicants had also claimed that duty drawback rate could have been computed on the incident of payment of duty on the ENA procured by them. Government notes that the ENA has not been declared as an input of the impugned goods by the applicants in their duty drawback application. The applicants have not produced any document evidencing payment of duty by them on the ENA. They have also not produced any incoming invoice showing receipt of ENA in their manufacturing pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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