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TMI Blog2018 (2) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... red product should be treated as “deemed to be imported material”, for the purpose of sub-section (1) of Section 75 of the Act. Availing of the Cenvat credit also does not disentitle the respondent from claiming the above benefit since there is not such restriction in Ext. P7. Whether it is the “all industry rates” stipulated by Rule 3 of the Rules or what is commonly called “the brand rates” to be fixed under Rule 6 of the Rules, that should apply in computing the rate of drawback applicable to the respondent? - Held that: - the rate applicable to the respondent would have to be determined separately under Rule 6 of the Rules. In Ext. P9, the second respondent has proceeded on the basis that fixation of the rate under Rule 6 should be only on the basis of the actual customs duty suffered by the product - the said reasoning is not sustainable in view of the clear wording in Ext. P7 notification. The rate of drawback applicable to the respondent’s product would have to be fixed in exercise of the powers under Rule 6 of the Rules. Appeal dismissed. - W.A. No. 1899 of 2010 in W.P. (C) No. 21315 of 2005 - - - Dated:- 7-7-2017 - K. Surendra Mohan and K.P. Jyothindranath, JJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wback could be claimed. Copper has been listed as one of the items at Sl. No. 21, in Ext. P7. The respondent claimed drawback in respect of the copper content in their manufactured product on the basis of Ext. P7. They approached the second respondent for fixation of the rate at which they were entitled to claim drawback, under Rule 6 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (hereinafter referred to as the Rules for short). The second respondent considered the contentions of the respondent and by Ext. P9 order, held that they were not entitled to any drawback, as claimed by them. It was aggrieved by Ext. P9 that the respondent had filed the writ petition. 3. The writ petition was contested by the appellants. A counter affidavit was filed taking up a contention that, the respondent had not imported copper or paid any customs duty. They had procured copper in the indigenous market after paying excise duty. They have got credit for the duty paid by them under the Cenvat Credit Rules. Inasmuch as no customs duty was paid by them on copper, it was contended that they were not entitled to claim drawback under Section 75 (1A) of the Customs Act. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or procured indigenously. It is only in the hands of such manufacturers that copper would qualify as a raw material. Since the respondent has procured copper from indigenous suppliers and had availed Cenvat credit for the Central Excise duty paid on the said produce they are not entitled to any further incentives. It is pointed out that, the respondent has no right to claim any benefit for the customs duty that they have not paid. 6. Counsel for the respondent on the other hand contends that, copper is a major ingredient in the product that is exported by them. Though it is not in dispute that copper rods are being used by them as one of the inputs in their manufacturing process, the same according to them is procured indigenously. It is to promote such indigenous procurement that the concept of deemed import has been introduced by Section 75(1A) of the Customs Act. In the manufacturing activity of the respondent, the indigenously procured copper is consumed and is exported out of India as their finished product, earning valuable foreign exchange for the country. It is to promote such activities that the notification Ext. P7 has been issued. Since the respondent s product does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed outside India shall, for the purpose of sub-section (1) of the said Section 75, be deemed to be imported material. (emphasis supplied) What has been declared by Ext. P7 notification is that, the whole of the material specified in the table annexed hereto as is contained in the goods manufactured in India and exported outside India shall be deemed to be imported material. Therefore, the deeming provision is intended to apply to the whole of the material contained in the goods manufactured. It is clear from the wording of the notification that, the emphasis is on the content of the manufactured products and not on the nature of the raw material used. Therefore, the contention of the learned counsel for the appellants, that unless copper in its raw form had been used as a raw material by the respondent, the benefit of drawback could not be claimed, has to fail. Ext. P7 notification does not give any importance to the nature of the raw material that is consumed in the manufacture. What is important is the content of the article in the manufactured product. It is not in dispute that, copper is contained in the manufactured product of the respondent. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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