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TMI Blog2020 (1) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... Vineet Kothari And Mr. Justice R. Suresh Kumar For the Appellants : Mr.G.Karthikeyan For the Respondent : Mr.P.Sridharan For M/s.Lakshmi Kumaran and Sridharan Attorneys COMMON JUDGMENT DR.VINEET KOTHARI, J. The Appellants/Revenue have filed the present intra Court appeals aggrieved by the order of the learned Single Judge dated 14.11.2017 in W.P.Nos.11645 to 11648 of 2003, whereby the learned Single Judge allowed the writ petitions filed by respondent/M/s.K.G.Denim Limited. 2.The learned Single Judge, by the order impugned before us, held that the Policy Circular Nos.6 and 35 could not override the statutory provisions in favour of the Assessee for granting the benefit of the DEPB or Duty Drawback, in case the Assessee in Domestic Tarrif area gets the job work of manufacturing yarn converted into Denim Fabrics through 100% EOU Unit and the said goods are exported out of India. The relevant reasons given by the learned Single Judge in the impugned order are quoted below for ready reference. 11.In my considered view, the ratio of decision of the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and the impugned orders are set aside. Writ Petition No.11645 of 2003 is disposed of for the reasons stated in the preceeding paragraphs. No costs. 3.The learned Single Judge relied upon the Division Bench Judgment of this Court in the case of Commissioner of Customs, Tuticorin Vs. L.T.Karle Co. [2007 (207) E.L.T. 358 (Mad.)] and the Karnataka High Court Judgment in the case of Karle International Vs. Commissioner of Customs, Bangalore [2012 (281) E.L.T. 486 (Kar.)] . 4.The learned counsel for the Appellants/Revenue Mr.G.Karthikeyan however sought to rely upon some judgments of Gujarat High Court, Madhyapradesh High Court, Kerala High Court and the order passed by the learned Single Judge of this Court in W.P.No.15921 to 15924 of 2018 etc. batch and to submit that by a Statutory Notification, the policy decision of the State Government in this regard could be changed or clarified. However, the learned counsel for the Appellants/Revenue fairly submitted the cases, cited by him, did not deal with the Circulars, as was the case before the earlier Division Bench of the Madras High Court and the Karnataka High Court. The ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availing the benefit of the duty drawback under Section 75 of the Act for the imported materials used in the manufacture of the goods which are exported, denial of the same on fictitious reason is, in our considered opinion, arbitrary and capricious. Refusal to sanction the duty drawback on the materials/inputs imported, on such imaginary reasons, would otherwise defeat the very intention of the legislature referred in detail supra. 12.2.6. As it is a settled law that fiscal laws must be strictly construed, words must say what they mean and nothing should be presumed or implied, at the risk of repetition, we observe that even though clause 2 (c) of the notification dated 1.9.98 states that the rates of drawback specified in the Table shall not be applicable to export of any of the commodities/products if such commodity/product is manufactured and/or exported by a unit licensed as hundred per cent export-oriented undertaking in terms of the relevant provisions of the Import and Export Policy in force, the same stands clarified by a subsequent circular No.31 of 2000 dated 20.4.2000 to the effect that DTA units may utilize the idle capacity of EOU/EPZ units, the inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Rule 4 of the Rules and the notification and the circulars issued therein cannot, therefore, be denied on the ground that the finished goods were manufactured in the 100% EOU. Hence, the second issue is answered in favour of the assessee. 13.1. The third question of law is whether the Tribunal is correct in law in ignoring the fact that the required permission from the Assistant Commissioner in charge of the 100% EOU was not obtained by the exporter. 13.2. In view of the circular dated 14.9.98 issued in clarification to clause 2 (c) of the notification dated 1.9.98 which was issued in accordance with Rule 3 read with Rule 4 of the Rules, the question of getting permission from the authorities concerned does not arise at all and in any event, when Section 75(3) of the Act provides that the power to make rules conferred by sub-section (2) shall include the power to give drawback with retrospective effect, the refusal to give due weightage to the permission obtained by the first respondent in July 1999, even though it is postperiod permission, cannot be appreciated, as such permission has to be considered not only to advance but also to achieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down under the Drawback Rules will have to be followed for fixation of Brand rates of Drawback. Such exporters will have to apply to the Directorate of Drawback for fixation of Brand rates on exports under DEPB. However, under no circumstances, such exporters will be allowed to claim All- Industry Rate of Drawback. 14. Relying on these two Circulars, the Duty drawback is denied to the first appellant. It is settled law that a right vested under a statutory provisions cannot be taken away by virtue of Circulars issued from time to time, if they are contrary to statutory provisions. Under Section 75, to be eligible for Duty drawback, all that the exporter has to satisfy is that the goods are manufactured, processed or on which any operation has been carried out in India. It is immaterial where the said manufacturing or processing has taken place. It may be in his Unit or it may be in EOU unit. Guiding principle is, it should have been manufactured or processed in India and exported. The Circular 67/98 was issued only to enable EOU Units to overcome the problems which they were facing, so that, instead of keeping their machinery idle, they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he All Industry rate, if he is not interested in approaching the authorities, he cannot be denied the all Industry rate, fixed by the Government. 6.Having heard the learned counsel for the parties and in view of the legal position, we are of the opinion that there is no merit in the present intra Court Appeals filed by the Revenue and the view of the learned Single Judge deserves to be upheld. We are of the opinion that the Circulars like Circular No.74/1999-Cus dated 05.11.1999 as well as the Circular No.31/2000-Cus dated 20.04.2000 could not have restricted or denied the benefit of Drawback or DEPB if such manufacturing was done by 100% EOU Units and then exports were made by such 100% EOUs. We have quoted below Paragraph No.4 of the Circular No.74/1999- Cus illustratively to explain the said point. 4. It has been brought to the notice of the Board that there is a lack of clarity as to who will file the Shipping Bill and where the Shipping Bills of such exports will be assessed. It is clarified that the Shipping Bill in such case will be filed in the name of DTA unit and the name of EOU/EPZ unit will also be mentioned on the Shipping Bill as j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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