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TMI Blog2018 (5) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent No. 2; and (ii) Order No. SEEPZ-SEZ/I-AII/DBK/978/WP/SPFL/2014-15/03290 dated 15.02.2017 passed by Respondent No. 3; (b) this Hon'ble Court be pleased to issue writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India, ordering and directing the Respondents, their subordinate servants and agents - (i) to forthwith sanction and grant to the Petitioner the deemed export drawback at the rate mentioned in column "B" of the Schedule of the All Industry Rate of Duty Drawback published vide Notification No. 68/2011-Customs (N. T.) dated 22.09.2011; (ii) to forthwith sanction and grant the drawback of Rs. 7,87,837/- and Rs. 50,54,299/- in respect of POY supplied by the DTA units to the Petitioners at the rate of 4 per cent specified in column "B" of Serial No. 540203 of the Schedule of All Industry Rate of Duty Drawback as claimed in Applications for duty drawback dated 09.11.2013 and 10.03.2014 of the Petitioners (Exhibits "H" & "Q" hereto)" 3. It is the case of the petitioner that in terms of a letter/permission dated 29th July, 1994 and as amended from time to time, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Drawback Rules"). 5. Rule 3 and Rule 7 of the Drawback Rules are relied upon together with a notification dated 22nd September, 2011, copy of which is at Exhibit 'E', to urge that the petitioner is entitled to such drawback. However, a policy circular has been issued by the authorities under the Foreign Trade (Development and Regulation) Act, 1992, which says that the deemed export drawback in terms of Para 8.3(b) of the FTP, including as per Column 'B' of All Industry Rate of Duty Drawback under the Duty Drawback Schedule of the Department of Revenue is not admissible if the facility of CENVAT Credit/rebate is availed. However, if the basic customs duty has been paid, then, that is refundable in terms of para 8.5 of the FTP. However, Para 8.5 prescribes that such supplies shall be eligible for deemed export drawback on customs duty paid on inputs/components. Thus, there is a clarification that basic customs duty paid can be taken back as brand rate of duty drawback, based on actual duty paid documents as per the procedure prescribed in Chapter 8 of the FTP and Chapter 8 of the HBP Volumn-I. It is in these circumstances that the petitioner stated that in the pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at which, detailed submissions were canvassed, but on 15th February, 2017 (impugned order), the petitioner's claim for deemed export drawback as per Column 'B' of All Industry Rate of Duty Drawback Schedule was rejected. 11. The findings to the extent relevant and to be found in the impugned order read thus:- "8. I have carefully gone through the available material on record and the written submissions made by the Applicants during the Course of personal hearings. ..... 10. It is not a dispute that the applicants are entitled to claim the refund of duty drawback as per para 8.5 of FTP for custom duty paid on inputs/components. The only issue is the route through which they are entitled to claim the refund. The applicants are insisting that they are entitled to claim the duty drawback as per column 'B' of AIR schedule notified by D/O Revenue, whereas the department's view is that the applicants can get the refund only after submission of documentary evidence in respect of custom duty paid and getting the same fixed through route of brand rate fixation. 11. On perusal of the provisions it is noted that for refund of drawback Para 8.5 of the FTP categoric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule where the CENVAT Credit has already been availed. This position was specifically clarified by DGFT through its Policy Circular No. 9 dated 30.10.2013. ..... 17. It has been further contended that no such prohibition or bar was in FTP 2009-2014, and the prohibition/bar has come for the first time in the FTP 2015-2020. In this connection, its noteworthy that the Policy Circular No. 9(RE-2013)/2009-14 dated 30.10.2013 was issued to clarify the aforesaid position. The FTP 201520 only takes into account the clarified position of FTP 2009-14 and in no way can be considered as the amendment of policy provision. Therefore, the contention of the applicants is not tenable." 12. When this petition was filed and a copy served on the respondents, the Join Development Commissioner in the office of the Development Commissioner, SEEPZ, Special Economic Zone (SEZ), Andheri (East), Mumbai - 400 096 has filed an affidavit in reply. In that affidavit in reply, the stand is that deemed export scheme has been devised to neutralise the duty components, namely, terminal excise duty on the finished products and the excise duty/customs duty on the inputs (raw materials/components). The excise du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he FTP 2009-2014. However, para 8.3.3 of the HBP provides that when All Industry Rate of Duty Drawback is not available or same is less than 4/5th of duties actually paid on materials or components used in production or manufacture of the said goods, an application in ANF 8 along with prescribed documents may be made to the Regional Authorities or Development Commissioner for fixation of brand rate. It was not required to file an application to ANF 8 for fixation of brand rate. Mr. Shah was at pains to point out that Para 8.5 of the FTP 20092014 read with Para 8.3.3 of HBP Volume-I makes it clear that while claiming deemed export drawback in terms of Para 8.3(b) of FTP 2009-2014 that the applicant has an option to claim drawback at the rate specified in the Schedule of All Industry Rates of Duty Drawback published by respondent no. 1. The applicant has further option to seek fixation of brand rate in case the condition mentioned in Para 8.3.3 of the HBP Volume-I is satisfied. Once a notification has been issued being Notification No. 68/2011-Customs (NT) dated 22nd September, 2011 and respondent no. 1 has published the revised Schedule of All Industry Rates of Duty Drawback for 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Drawback Schedule notified by the Department of Revenue, whereas, the respondents are of the view that the petitioners can obtain refund only after submission of documentary evidence in respect of the customs duty paid and getting the same fixed through the route of brand rate fixation. It is in these circumstances that the interpretation placed on these policies is neither perverse nor vitiated by an error of law apparent on the face of the record warranting interference of this court in writ jurisdiction. Mr.Jetly would submit that this is not a court of appeal, but in writ jurisdiction this court is concerned with only one aspect, namely, whether the application of the petitioner was duly considered and consistent with the policy, a decision has been taken or not. If the view taken by the respondents is in consonance with the terms, then, the interpretation of the policy by the respondents does not call for any interference in writ jurisdiction merely because another view is possible. Hence, the writ petition is devoid of merits and it be dismissed. 16. With the assistance of the learned counsel appearing for both sides, we have perused the petition and all annexures. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces utilized in the manufacture of the said exported products. This facility is generally availed of by the exporters as no proof of actual duties suffered on the inputs/input services used, is required to be produced. After the announcement of the Budget, various Export Promotion Councils/ Associations are consulted and their suggestions as well as their requests and justifications for suitable enhancement of rates and also any changes sought in the scheme of the Drawback Table or the entries therein, are taken note of whilst finalizing and announcing the new All Industry Rates and which generally are fixed as a percentage of the FOB price of the exported goods. Thereafter, the new All Industry Rate of drawbacks are notified every year after factoring in the changes in duty rates effected by the Budget. This is generally the procedure followed whilst arriving at the All Industry Rate and at which rate the exporter can claim drawback under Rule 3. It is for this reason that Rule 3 provides that subject to the provisions of (a) the Customs Act, 1962 and the Rules made thereunder; (b) the Central Excise and Salt Act, 1944 and the Rules made thereunder; (c) the Finance Act, 1994 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys; (2) On receipt of the application referred to in sub-rule (1), the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, may, after making or causing to be made such inquiry as it deems fit, allow payment of drawback to such exporter at such amount or at such rate as may be determined to be appropriate, if the amount or rate of drawback determined under rule 3 or, as the cased may be revised under rule 4, is in fact less than four-fifth of such amount or rate determined under this sub-rule. (3) Where an manufacturer or exporter desires that he may be granted drawback provisionally, he may, while making an application under sub-rule (1), apply to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, in writing in this behalf in the manner as has been provided in clause (a) of sub-rule (2) of rule 6 for the applications made under that rule and the grant of provisional drawback shall be considered in the manner and subject to the conditions specified in clauses (b) and (c) of sub-rule (2) and sub-rule (3) of rule 6, subject to the condition that bond required to be executed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lauses (b) and (c) thereof. Hence, read together and harmoniously it will have to be held that the Circular cannot override the Rules and particularly Rules 3 and 7 of the Drawback Rules and the sub-rules thereunder. This being the case, clause (d) of the said Circular is clearly unsustainable and has to be struck down. On the same parity of reasoning, and more so because the orders/letters impugned herein, rely upon the said Circular to reject the applications of the Petitioner seeking determination of the Brand Rate of drawback under Rule 7, even the said impugned orders/letters will have to be set aside." 19. In the instant case, the petitioner's applications at pages 68 and 91 to 95 of the papers book in clearest terms stated that they have purchased partially polyester yarn during the period 1st October, 2012 to 31st March, 2013 by making payment of excise duty and education cess from M/s. Beekaylon Synthetics Private Limited and B. F. Industries Limited, which is treated as deemed export and entitled for benefit of duty drawback at All Industry Rate. The drawback of 4% is specified in Box 'A' (when no CENVAT Credit is availed) and also 4% in Box 'B' (when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g payment of actual duty. It is in these circumstances that the order proceeds on the footing that there is a bar now in the FTP of 2015-2020. However, there is a policy circular dated 30th October, 2013 issued to clarify the aforesaid position. Thus, the FTP 2015-2020 only takes into account the clarified position of FTP 2009-2014 and in no way can be considered as the amendment of policy provision. Therefore, the contention of the applicant is not tenable. 20. In the applications made by the petitioner, it has very clearly stated that it has purchased partial polyester yarn during the period for which the application for duty drawback is made by making payment of excise duty and education cess from the two suppliers. That is treated as deemed export and entitled for benefit of duty drawback at All Industry Rate. The drawback is 4% as specified in Box 'A' when no CENVAT Credit is availed and 4% in Box 'B' when CENVAT Credit is availed. When the same rate is presented in Box 'A' and 'B', the exporter is entitled for drawback and the issue of input credit availed or not is not relevant. 21. It was this simple aspect of the matter, which should have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or input services are used in the production or manufacture of goods and the duties or taxes paid on such materials or components or input services; Provided that the Commissioner of Central Excise or the Commissioner of Customs and Central Excise may, if he is satisfied that the manufacturer or exporter was prevented by sufficient cause from making the application within the aforesaid time, allow such manufacturer or exporter to make such application within a further period of thirty days; (2) On receipt of the application referred to in sub-rule (1), the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, may, after making or causing to be made such inquiry as it deems fit, allow payment of drawback to such exporter at such amount or at such rate as may be determined to be appropriate, if the amount or rate of drawback determined under rule 3 or, as the cased may be revised under rule 4, is in fact less than four-fifth of such amount or rate determined under this sub-rule. (3) Where an manufacturer or exporter desires that he may be granted drawback provisionally, he may, while making an application under sub-rule (1), apply t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the particular goods exported by several exporters with different prices and they are fixed on the basis of data supplied by the Export Promotion Councils and collected by Directorate from other sources. What we found from the compilation tendered is that there are duty drawback rates effective from 1st October, 2011. In that, there is a Schedule and that Schedule under heading Chapter 3 includes Polyester Filament Yarn. The tariff item is 540203. Box 'A', drawback is when CENVAT facility has not been availed and Box 'B', drawback is when CENVAT facility has been availed. There is drawback rate and drawback cap per unit. What we have been shown is the judgment of this court and which clearly holds that the scheme is not to deny the benefit by placing obstacles and hurdles. In the instant case, Chapter 8 of the HBP is titled as "Deemed Exports". In that, there is a procedure for claiming deemed export drawback and terminal excise duty refund/exemption. That is in Para 8.3.1. In that, it is stated in Para 8.3.3 that where All Industry Rate of Drawback is not available or same is less than 4/5th of duties actually paid on materials or components used in production or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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