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TMI Blog2023 (9) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... said additional duty is equated to a duty of excise which is leviable does not essentially change the character of that duty as being one other than that which is imposed on import of articles into India. Since in the present case, an AI Rate had been prescribed, there was no corresponding obligation placed upon the petitioner to independently prove the payment of customs or central excise duty or for that matter service tax. In any case, the scope of Condition No. 6 has been duly explained in Combitic Global and since undisputedly, it was the AI Rate which applied, the submissions urged by the respondents on this score are clearly rendered untenable. Undisputedly, the free shipping bills were duly amended on 27 February 2015 whereafter the petitioner applied for release of drawback benefits on 06 May 2015. In terms of Section 75A of the Customs Act, interest becomes payable upon the expiry of a period of one month from the date of making of an application seeking drawback till such time as the payment is ultimately affected. In the facts of the present case, therefore, the respondents are also liable to pay interest which would commence upon the expiry of the period of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required in order to claim drawback benefits and had to the contrary submitted free shipping bills. It appears to have approached the respondents for appropriate amendments being made to the aforesaid free shipping bills in terms of Section 149 of the Customs Act 1962 [Customs Act]. The said permission ultimately came to be granted on 27 February 2015 with the office of the Commissioner of Customs acceding to the request of the 15 shipping bills in question being duly amended and being treated as duty drawback shipping bills. It is thereafter that the petitioner submitted the relevant documents for disbursal of drawback claims. 4. The record would further bear out that although various representations in this respect were made, the aforesaid requests were not acceded to. In the meanwhile, and more particularly on 04 November 2019, the respondent no. 2 issued a Memorandum asserting that the petitioner would not be entitled to drawback benefits since the import of gold dore bars had been undertaken without payment of BCD. It was further asserted by the respondents that the petitioner had also contravened Condition No. 23 of Notification No. 98/2013 dated 14 September 2013 [Dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Learned counsel further submitted that the nature of an additional duty which is paid in terms of Section 3 of the Tariff Act was lucidly explained by the Supreme Court in Hyderabad Industries Ltd. v. Union of India (1999) 5 SCC 15 where the following observations came to be made: - 12. Section 12 of the Customs Act levies duty on goods imported into India at such rates as may be specified in the Customs Tariff Act, 1975. When we turn to the Customs Tariff Act, 1975, it is Section 2 which states that the rates at which duties of customs are to be levied under the Customs Act, 1962 are those which are specified in the First and Second Schedules of the Customs Tariff Act, 1975. In Section 12 of the Customs Act there is no reference to any specific provision of the Customs Tariff Act, 1975. In other words, for the purpose of determining the levy of customs duty on goods imported into India what is relevant is Section 12 of the Customs Act read with Section 2. 13. On the other hand levy of additional duty under Section 3 is equal to the excise duty for the time being leviable on the like article which is imported into India if produced or manufactured in India. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. This provision corresponds to Section 2-A of the existing Act, and is necessary to safeguard the interests of the manufacturers in India . Apart from the plain language of the Customs Tariff Act, 1975 even the notes to the clauses show the legislative intent of providing for a charging section in the Tariff Act, 1975 for enabling the levy of additional duty to be equal to the amount of excise duty leviable on a like article if produced or manufactured in India was with a view to safeguard the interests of the manufacturers in India. Even though the impost under Section 3 is not called a countervailing duty there can be little doubt that this levy under Section 3 is with a view to levy additional duty on an imported article so as to counterbalance the excise duty leviable on the like article indigenously made. In other words Section 3 of the Customs Tariff Act has been enacted to provide for a level playing field to the present or future manufacturers of the like articles in India. 9. According to Mr. Kunal, Hyderabad Industries is a binding authority for the proposition of additional duty paid in terms of Section 3 of the Tariff Act falling within the broad category ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise of powers under Section 75(2) of the Customs Act, 1962 and Rules 3 and 4 of the 1995 Rules and hence, in terms of para 8.3.6 of the HBP, they would have to be made applicable mutatis-mutandis to deemed exports. Rule 8.3.6. reads as follows: 8.3.6. Subject to procedure laid down in HBP, Customs and Central Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports. 76. Therefore, it is quite evident, since AIR for duty drawback in respect of the goods in issue is available and the rate stipulated in columns A and B of the schedule is the same, the condition stipulated in the 2013 Circular, that duty drawback on customs duty would be available only upon fixation of brand rate, which, in turn, is based on actual duty-paid documents, cannot apply to the petitioner. The said condition contained in the 2013 Circular is otiose insofar as the petitioner is concerned. 77. In this context, it is important to bear in mind that duty drawback on customs duty component is calculated based on the industry average of customs duty suffered on several inputs like High-Speed diesel (HSD), furnace oil, packing material and other inputs. Therefore, it is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article: Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the Official Gazette, specify the rate of additional duty having regard to the excise duty for the time being leviable on a like alcoholic liquor produced or manufactured in different States or, if a like alcoholic liquor is not produced or manufactured in any State, then, having regard to the excise duty which would be leviable for the time being in different States on the class or description of alcoholic liquor to which such imported alcoholic liquor belongs. Explanation . In this sub-section, the expression the excise duty for the time being leviable on a like article if prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of Rule 3 of the Drawback Rules, 1995, an exporter is entitled to claim a drawback on the export of goods at such amount or rates as may be determined by the Union Government. The Drawback Rules, 1995 thus employ the words duty and tax without confining the same either to the Customs Act or the Central Excise Act, 1944. This would inevitably lead us to conclude that as long as goods have suffered a tax or duty at the time of import, the claim for drawback at the stage of export would be available. 17. We further find that Condition No. 6 of the Drawback Notification would also not detract from the claim of the petitioner for drawback benefits. Condition No. 6 is extracted hereinbelow: - (6) The figures shown under the drawback rate and drawback cap appearing below the column Drawback when Cenvat facility has not been availed refer to the total drawback (customs, central excise and service tax component put together) allowable and those appearing under the column Drawback when Cenvat facility has been availed refer to the drawback allowable under the customs component. The difference between the two columns refers to the central excise and service tax comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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