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TMI Blog2016 (8) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... loes per day in view of the Certificate of APEDA. There is no dispute that the slaughtering capacity has to be, prima-facie, approved by the State Pollution Control Board. section 50(2) of the Customs Act 1962 – contravention – inadmissible drawback – Held that: - there is no dispute of export of packing material along with the frozen meat. In this view of the matter, there is no irregularities in the drawback granted to the appellant pursuant to export of frozen meat for which, the remittance is admittedly been received in convertible foreign exchange - drawback on packing material allowed. The concerned authority is directed to immediately refund within a period of 45 days the amount of duty drawback deposited by the appellant in the course of investigation and/or recovered from the appellant with interest as per Rules. Appeal allowed. - Cus Appeal No. 70089/15 - Final Order No. 70307/2016 - Dated:- 14-6-2016 - Mr. Anil Choudhary Member (Judicial) and Mr. Anil G. Shakkarwar Member (Technical) Shri B. K, Singh Garvit Chauhan, both advocates for the Appellant(s) Shri D. S. Mann, Asstt. Commr. (D.R.) for the Department ORDER The issue in this appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nauthorized slaughtering and 15093.465 MT exported in excess of maximum production capacity ; (d) The appellant/exporter have filed wrong declaration with customs at the time of export to the effect that the raw material was procured from APEDA approved sources, contravening the provisions of section 50(2) of the Customs Act 1962 with intent to avail inadmissible drawback. (e) That the appellant/exporter availed inadmissible export incentives by way of claiming drawback on the said quantity of 17625.465 MT to the extent of ₹ 4,94.01.708/- which is recoverable from them under the provisions of Rule 16 of Customs Excise Duties and Service Tax Drawbacks Rules, 1995 along with interest under Section 75A(2) of the Act. 3.1 The appellant contested the show cause notice stating that the Indian Meat Exports are regulated as per the Raw Meat (Chilled/Frozen) (Quality Control and Inspection), Rules, 1992 made under Section 17 of The Export (Quality Control and Inspection) Act, 1963 which are further amended vide Notification No. S.O.3024(E) Dated 28.12.2012 issued by Department of Commerce, Ministry of Commerce and industry, Government of India. The Rules include standards for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to make it comprehensive. (ii) Exporters would now be required to certify both (a) That the items have been obtained/sourced from an APEDA registered integrated abattoir or from APEDA registered meat processing plant and (b) That the raw material have been sourced exclusively from APEDA registered integrated abattoir/abattoir. (iii) Designated Veterinary Authority of the state are now authorized to issue the certificate on the basis of the inspections carried out by Veterinarians duly registered under the Indian Veterinary Council Act 1984 employed by the exporting unit in relevant laboratories. 3.3 The above amendment dated 31.10.2011 was made with immediate effect which means that the Same came into effect from 31.10.2011 itself. However, on the representation of the Meat exporter's trade a further Notification No 82 (RE-2010)/2009-2014 dated 15 th December,2011 was issued to bring into effect the above provision of Note-6 of Notification No. 82 after six Months from today i.e. from 15 th June, 2012 , Rest of the notification No 82 (RE-2010)/2009-2014 dated 31.10.2011 date of issue i.e. 31.10.2011. 3.4 For the export purposes, frozen Boneless meat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Further, penalty of ₹ 50,00,000/- was imposed on the appellant under Section 114 of Customs Act, 1962. 5.0 Being aggrieved the appellant have preferred appeal before this Tribunal on the following grounds : 5.1 First of all, it is urged that Drawback is not an incentive. As per Rule 2(a) of the Drawback Rules In these rules, unless the context otherwise requires,- (a) drawback in relation to any goods manufactured in India and exported, means the rebate of duty or tax, as the case may be, chargeable on any imported materials or excisable materials used or taxable services used as input services in the manufacture of such goods; Thus the Drawback is rebate in lieu of duty or tax charged on materials use for the manufacture of the goods exported. This works on the principle that you can export the goods but cannot export the taxes and for making the Indian made goods more competitive in the international market. 5.2 The basic requirement for entitlement for Drawback under section 75 of the Act is that the goods manufactured in India should be exported. Other conditions to be fulfilled for grant of Drawback under Section 75 of the Act are as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of repetition, it is submitted that the DRI has itself agreed that the appellant had slaughtered more than 500 buffaloes in their abattoir. The appellant had agreed to this in all their statements including the statements of their employees. However, the DRI conveniently forgot to take note of the fact that in the same certificate where the number of buffaloes to be slaughtered was mentioned, the capacity to produce a quantity of 170 MT per day of boneless buffalo frozen meat was also mentioned. Thus, it is undisputed fact that the appellant had capacity to produce 170 MT of boneless Buffalo Meat per day in their premises. The capacity of any factory to produce or manufacture a commodity is measured by the capacity to produce the final product and not the capacity to consume the raw material. For the appellant, the number of buffalo is raw material. It is Buffalo Meat which is the final product and violation of the provision relating to the capacity is to be assessed by that of final product and not of raw material which was number of buffaloes. 5.5 (ii) The allegation of the DRI is that as the appellant had capacity to slaughter only 500 buffaloes per day, it is presumed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under sub-Section (7) of Section 25 of The water (Prevention and control of Pollution) Act, 1974 and similar provision under Sub-Section (4) of Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, the NOC/Consent, unless refused, be deemed to have been given unconditionally on the expiry of a period of 4 months from the date of filing/forwarding of the application. Since, the notice never received any adverse report or refusal from UPPCB, Lucknow with respect to their application, they considered the same to have been granted as per the deeming provisions. Accordingly, they started slaughtering more than 500 Buffaloes per day and processing thereof in their Integrated Abattoir-Meat Processing Plant. However, it is clarified that the export quantity of Frozen Boneless Buffalo Meat always remained within the authorized limit of 170 MT per day, granted to them by APEDA. 5.6 Another allegation in the SCN is that the appellant had filed wrong declaration before the Customs Authority at the time of filling the Shipping Bills. The SCN nowhere specifies as to in which Shipping Bills the declaration was wrong. It is submitted that all Shipping Bills were accompanied b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmittee. According to the current Export and Import Policy of the Government of India, each export consignment is subjected to compulsory microbiological and other tests and a comprehensive pre-shipment inspection certificate is issued by the State Government Veterinarian. Each export consignment is accompanied by the Animal Health Certificate. This certificate also states that meat has been obtained from healthy, disease free livestock, which are free from contagious and infectious diseases, including foot and mouth disease and other diseases. The Health Certificate also confirms that the livestock have been subjected to ante-mortem inspection followed by post-mortem examination and that the meat is fit for human consumption, besides having the services of highly qualified and experienced veterinarians, microbiologists etc., employed by the exporting units. 5.9 The very nature of the certificate warrants that the animals are examined before slaughtering and after slaughtering at the premises of the exporter. The certificate is based on the reports of the Veterinary Doctors of the abattoir as well as designated by the State Authority. 5.10 The Revenue has completely ignored t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have their own slaughter house which is not the case with the appellant as they have their own integrated Abattoir-Cum-Meat Processing Plant. They had not obtained/sourced any raw material from any other plant either approved and registered with APEDA or not approved or registered with APEDA. This allegation was denied and was not accepted by the exporter, in their statements under Section 108 of the Customs Act, 1962. 5.12 It is further submitted that at the port of destination also, the importing countries conduct quality check. None of the consignments exported by the appellant had been rejected on this account. This also proves that the quality of meat exported by the appellant met the international standards. 5.13 Further, the Revenue have only presumed that since the appellant had permission to slaughter only 500 Buffaloes, they could not have produced the quantity of Meat exported. They conveniently ignored that the appellant had approved capacity to manufacture the quantity of 170MT of boneless frozen Meat. The said capacity in terms of weight was much more than the quantity exported by the appellant. 5.14 There is no provision to declare under Section 50 or 75 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n duly complied with and to the satisfaction of the department. More so the impugned goods were freely exportable subject to certain condition and the department has not proved that any of the conditions was not satisfied. Thus the goods were not liable to confiscation either under Section 50 or 113 (d) of the Act or under Section 11 of the Foreign Trade (D R) Act, 1992 as alleged in the show cause notice. It is re-iterated that impugned goods were neither Prohibited nor restricted nor STE and were Free to be exported and accordingly, the appellant did not contravene any provisions of APEDA, or Chapter 2 of Schedule 2 or Section 50 or 113 (d) of the Act or Section 11 of Foreign Trade (D R) Act, 1992 and thus, the allegations made under Para 16, 18 and 19 of the Show Cause Notice are not sustainable or maintainable. 5.16 (a) Section 113(d) of Customs Act clearly states that goods Prohibited under the Customs Act or under any law for the time being inforce are liable for confiscation under this section. The prohibited goods are defined under Section 2 (33) of CA, 1962 which means any goods the import or export of which is subject to any prohibition under this Act or any other law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the appellant exported more quantity. Thus, the APEDA Registration Certificate was not valid for such excess quantity exported. This fact was not brought to the notice of the Customs Officer at the time of export. Further under the Certificate granted by APEDA for integrated abattoir cum meat processing plant required the appellant to produce the raw meat by slaughtering the animals in their abattoir and processing of the meat. Thus, the provision of Note 6 applies not only to a meat processing plant who obtain raw meat from APEDA approved outside abattoir but also to integrated abattoir cum meat processing as in the case of the appellant. So far the contention of appellant is concerned, they had applied to the UPPCB for the consent/NOC for increasing the slaughtering capacity to 1000 animals per day, as it was a precondition for registration with APEDA. The authority of UPPCB had inspected the unit of the appellant and forwarded the report on 02/02/2011 and in pursuance thereto, the compliance as suggested had been made by the appellant and intimation for the same had been given to the UPPCB. Further, the contention of the appellant that under the provisions of the deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arcass weight was in the range of 301 kgs to 458 Kgs, with average weight of 386.42 Kgs. was not believed as in several weightmant slips maximum weight appeared to be 318 kgs. Thus, definitely the balance quantity of 15093 MT was produced in a non-APEDA sanctioned abattoir whether it was outside or inside their plant. But in any case, they were not authorized to produce more than 16455 MT of meat during the aforesaid period. Therefore, it is evident that the quantity of 17625.465 MT of frozen meat was exported in excess of the quantity sanctioned by APEDA from the plant of appellant. Thus, the declaration filed by the appellant with the Customs at the time of export to the effect that the raw material was procured from APEDA approved sources is apparently wrong. Thus, the appellant have contravened the provisions of Section 50, sub-section (2) of the Customs Act with intent to export prohibited goods and to claim inadmissible draw-back claim. It was further urged that as prohibited goods were exported or smuggled out of the country by the appellant, therefore, any amount which was due in the form of duty drawback, as claimed by the appellant was recoverable. Accordingly, he prays f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless given or refused earlier, be deemed to have been given unconditionally on the expiry of a period of four months of the making of an application in this behalf, complete in all respects to the State Board. Similarly, Section 21 (4) of The AIR (Prevention and Control of Pollution) Act, 1981, provides that within a period of four months after the receipt of the application for consent referred to in subsection (1), the State Board, shall, by order in writing, and for reasons to be recorded in the order, grant the consent applied for subject to such conditions and for such period as may be specified in the order, or refuse consent . It is an admitted fact that the Pollution Control Board had not refused consent nor made any further suggestions for compliance to be made. Thus, there was deeming consent in favour of the appellant to slaughter and process more than 500 animals/buffaloes on the expiry of four months from the date of application being 26/9/11. In this view of the matter, we find that the whole case of the revenue is misconceived as the same is based on presumption that the appellant could not have processed more than 500 buffaloes per day in view of the Certificate ..... 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