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TMI Blog2024 (9) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... porter, the allegation made by the Adjudicating Authority was devoid of any merit and there was no finding or discussion by the Adjudicating Authority whereby any conclusive evidence as how non-issuance of ARE-2 by the petitioner would tantamount to the intentional involvement in abetement of erroneous claim of the drawback by the exporter which purely relates to the custom portion of the drawback when the exporter manufacturer is not unduly getting the double benefit. The Revisional Authority while Considering the aspect in the facts of the case of the petitioner has not taken into consideration the fact that the rate of duty drawback is 1% in the facts of the case which relates to the custom portion only and not the Central Excise portion and therefore, the exporter did not get any double benefit in the facts of the case. In such circumstances, it cannot be said that the petitioner has committed any breach of the Rules by issuing the DOC without issuing ARE-2. In such circumstances, the impugned order passed by the Revisional Authority is not sustainable and is accordingly, quashed and set aside so far as the petitioner is concerned with regard to the levy of penalty which is del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting on or in consequence of the Impugned the Impugned Order No.185-189/2020-CUS(WZ)/ASRA/MUMBAI dated 11.09.2020 along with corrigendum dated 17.11.2020 (Annexure I); (d) for ad-interim relief in terms of prayer (c) above; (e) for costs of the petition/application and orders thereon; and; (f) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case. 5. The brief facts of the case are as under: 5.1. The petitioner is engaged in the manufacturing of Edible and Cotton Oil, De-oiled Cake (for short the DOC ). The DOC manufactured by the petitioner was exported directly through merchant exporter. The petitioner procured Hexane without payment of excise duty in terms of Notification no.43/2001 dated 26.06.2001 issued in term of Rules 19 (2) and 19 (3) of the Central Excise Rules, 2002 (for short the Rules ), which provides conditions/safeguards and procedure for procurement of excisable goods without payment of duty for the purpose of use in the manufacture or processing of export goods and their exportation out of India. 5.2. The petitioner accordingly cleared DOC manufactured by it from the factory, which was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9,26,138/- should not be demanded and recovered under Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (for short the Drawback Rules, 1995 ) read with Section 75 and proviso to Section 28 (1) of the Customs Act, 1962 as well as to levy the penalty upon the petitioner under Section 114 (iii) of the Customs Act, 1962. 5.8. The Petitioner by reply dated 30.10.2010 contended that the petitioner used both Central Excise duty free Hexane and Central Excise duty paid Hexane to manufacture DOC which were not stored separately and accordingly, it was physically not possible to record the production and clearance separately. 5.9. It was also further contended that the Petitioner was having common pool of Hexane and finished DOC documents and the same were prepared on the basis of ratio of production using Hexane and there was no connivance with the merchant exporter. It was therefore submitted that there was no requirement to issue ARE-2 to the merchant exporter in case where the duty paid Hexane is used to manufacture DOC. 5.10. The Adjudicating Authority passed the Order-In-Original dated 04.04.2013 whereby the duty drawback to the exporter was disallowed co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Component . Reliance was also placed on the Drawback Rules 1995, wherein Rule 2A of the said rules defines the drawback. Learned advocate Mr. Hardik Modh also referred to the Notification No. 81 of 2006 dated 13.07.2006 as well as Notification No. 103 of 2008 dated 29.08.2008 to submit that the Commissioner Appeals while considering the issue of allowability of the duty drawback to the merchant exporter has rightly held that the duty drawback claimed by the merchant exporter was on the basis of the rate of 1%, which is relatable to the Custom Components and therefore, there was no need for the petitioner to issue ARE-2 for the purpose of clearing the goods which were manufactured by using Hexane without payment of Central Excise. 6.1. It was further submitted that the Circular No. 35 of 2010 dated 17.09.2010 and Notification no. 84 of 2010 relied upon by the Commissioner (Appeals) clearly shows the conditions which exists in the earlier notification and therefore there was no ambiguity in the policy of the Government that where the duty drawback rate as indicated is the same in both for the Custom Component and the Excise Component then only Custom Component is availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake any difference as there is no intention established by the Adjudicating Authority and the only allegation levelled against the petitioner stand on pre-condition that the petitioner exporter had knowingly or intentionally claimed the duty drawback erroneously. However, the Commissioner (Appeals) has categorically held that the legality of claiming custom portion of the drawback by the merchant exporter, the allegation made by the Adjudicating Authority was devoid of any merit and there was no finding or discussion by the Adjudicating Authority whereby any conclusive evidence as how non-issuance of ARE-2 by the petitioner would tantamount to the intentional involvement in abetement of erroneous claim of the drawback by the exporter which purely relates to the custom portion of the drawback when the exporter manufacturer is not unduly getting the double benefit. This aspect of the entire issue of removal of the goods without issuing ARE-2 is missed out by the Revisional Authority and the Revisional Authority has placed reliance only on the non-issuance of the ARE-2 and the likelihood of the exporter getting double benefit of duty drawback in case when the percentage of the duty dr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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