Ashok Leyland Limited Vs Principal Commissioner (Madras High Court)
The Madras High Court considered writ petitions challenging common revisional orders dated 08.03.2022 and consequential proceedings concerning the rejection and recovery of 7% brand rate drawback on the bus body portion of exported passenger buses. The petitioner also challenged CBEC communications dated 08.11.2006, 10.11.2006 and 10.04.2008.
The petitioner manufactured passenger buses for export, with chassis manufactured by it and bus bodies fabricated by independent small-scale industrial units. Due to difficulties in establishing the exact duty incidence on bus bodies, the Drawback Directorate, by Circular dated 05.12.1988, prescribed a simplified procedure allowing exporters to claim drawback at an average rate of 7% of the actual bus body cost, without production of detailed duty-paid documents. Circular dated 18.09.2003 subsequently directed that this practice should continue while fixing the brand rate for complete buses.
After the DEPB Scheme was extended to motor vehicles, the petitioner availed DEPB benefits concerning the chassis component while claiming the 7% brand rate drawback on the bus body portion. CBEC communications dated 08.11.2006 and 10.11.2006 took the view that simultaneous availment was impermissible and that claims had to satisfy Circular No.39/2001-Cus., dated 06.07.2001. Proceedings followed, resulting in withdrawal of brand rate approval, rejection of pending applications and recovery of drawback already sanctioned. The matter had earlier been remanded by the Court on 02.11.2020 for fresh consideration.
