Manufacturer or Exporter is not barred from seeking determination of the Brand Rate of drawback merely because, at the time of export, he had applied for and granted drawback at All Industry Rate
In the instant case, Alfa Laval (India) Ltd.(“the Petitioner”) was exporting excisable goods under claim for duty drawback available under Section 75 of the Customs Act, 1962 (“the Customs Act”) read with the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (“the Drawback Rules”). At the time of export of the finished goods, the Petitioner filed the shipping bill under claim of drawback in terms of Rule 3 of the Drawback Rules. Thereafter, within the stipulated time and with the requisite documents, the Petitioner filed an application for determination of drawback under Rule 7 of the Drawback Rules (“the application”).
Vide the orders/ letters dated April 19, 2012, June 11, 2012 and July 24, 2012 issued by the Additional Commissioner (BRU) of Central Excise, Pune – I (“the orders”), the application was rejected on the ground that the Petitioner is barred from seeking a determination of Special Brand Rate under Rule 7 the Drawback Rules because, at time of export, he had already applied for and was granted drawback at All Industry Rate under Rule 3 thereof. Further, in terms of Para 2(d) of Central Board of Excise and Customs’ Circular F. No. 606/04/2011-DBK dated December 30, 2011 (“CBEC Circular”), an exporter once having availed the All Industry Rate of drawback at the time of export, cannot file an application for determination of the Brand Rate of drawback under Rule 7 of the Drawback Rules.
Being aggrieved, the Petitioner preferred an appeal before the Hon’ble Commissioner of Central Excise (Appeals) wherein again the application was rejected relying upon the CBEC Circular. Thereafter, the Petitioner filed a writ petition before the Hon’ble High Court of Bombay.
The Hon’ble High Court of Bombay after detailed analyses of the Drawback Rules directed the Department to accept the application of the Petitioner and process the same subject to compliance of the provisions of Rule 7 of the Drawback Rules.
The Hon’ble High Court further held that the CBEC Circular is liable to be struck down and on the basis of following observations:
Hence, the matter was decided in favour of the Petitioner.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)