Custom
TRT-2025-
New Delhi High Court
Date:-02-09-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 02 September 2022
Facts –
- The Petitioner, M/S COMBITIC GLOBAL CAPLET PVT. LTD., is a manufacturer and exporter of pharmaceutical products and converted its Domestic Tariff Area unit into a 100% Export Oriented Unit w.e.f. 28.09.2012.
- An application was filed on 08.04.2013 and claimed the duty drawback benefit for the period ending in September 2012, amounting to Rs.38,35,686/-.
- The Assistant DC via order dated 10.05.2013 rejected the petitioner’s claim. The principal reason given by the Assistant DC was that the claim for duty drawback (as a measure of deemed export benefit) could not be entertained, as the goods against which duty drawback was claimed, had been received in the unit, prior to it being declared an EOU.
- What was put against the petitioner was the 2013 Circular, the provisions of the Foreign Trade Policy 2009-2014 [in short, “FTP”] as also the provisions of the Handbook of Procedures 2009-2014 [in short, “HBP”.]
- Aggrieved, the petitioner filed a petition.
Issue –
- Whether the petitioner is entitled to duty drawback, confined to customs duty component, against deemed exports, even where it has claimed cenvat credit?
- Whether the claimant is required to submit duty-paid documents for fixation of brand rate?
Order –
- The court observed that the AIR duty drawback schedule published by the DOR is available concerning the goods in issue i.e., Sulphamethoxazole. The two columns i.e., A and B of the schedule represent two eventualities:- (i) the rate at which drawback is available when the cenvat facility has not been availed. (ii) the rate at which drawback is available when the cenvat facility has been availed.
- Insofar the goods in issue are concerned, (i.e., Sulphamethoxazole) the rate at which the duty drawback is the same in both the columns.
- And if the rate indicated is the same in both the columns, it shall mean that the same pertains to only customs component and is available irrespective of whether the exporter has availed of cenvat or not.
- Hence, 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.
- Thus, the fact that the petitioner was allowed to carry forward the advance authorization to the converted unit i.e., 100% EOU and thereafter fulfil the outstanding export commitment would furnish a clue that duty drawback for such goods should extend qua unutilized goods, which were available at the time of conversion of the DTA unit into a 100% EOU.
- Therefore the court held that the petitioner is not required to have a brand rate of duty drawback fixed, based on actual duty-paid documents for the return of basic customs duty.
- The impugned order dated 26.04.2016 was set aside. Petition disposed off
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