Custom, Excise & Service Tax Tribunal
Torrent Pharmaceuticals Ltd vs Commissioner Of Customs ... on 19 January, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. C/337/2000
[Arising out of Order-in-Original No.12466/2010 dated 26.7.2010 passed by the Commissioner of Customs
(Seaport-Export), Chennai]
Torrent Pharmaceuticals Ltd.
Appellants
Versus
Commissioner of Customs (Seaport-Export) Chennai
Respondent
Appearance:
Shri R.Alwan, Advocate Shri Parmod Kumar, SDR For the Appellants For the Respondent CORAM:
Honble Dr. Chittaranjan Satapathy, Technical Member Date of hearing : 19.1.2012 Date of decision : 19.1.2012 Final Order No.____________ Heard both sides. Shri R.Alwan, ld. Advocate appearing for the appellants states that the impugned goods were imported by a registered dealer under the DFRC scheme and the same were purchased by the appellants and exported against a pending export order. He states that, under a wrong advice, the impugned goods were exported under ARE-1 procedure under a free shipping bill. Later, the appellants realized that they are not entitled for export rebate as the impugned goods were not manufactured in India but were exported as such in the condition in which these were imported. Consequently, the appellants applied for conversion of free shipping bill to a drawback shipping bill which has been rejected under the impugned order by the jurisdictional Commissioner. Hence the appellants have filed this appeal.
2. Ld. advocate states that the jurisdictional Commissioner has rejected the prayer of the appellants for conversion on two grounds :-
(a) there was no examination at the time of export to identify the export goods as same as the goods which were imported earlier.
(b) the appellants have not given any specific reasons which were beyond their control that prevented them from filing proper drawback shipping bill.
Ld. Advocate states that the Commissioner should not have gone into the question of identification which would arise only after the conversion of the shipping bill is allowed and it would be for the jurisdictional Asst. Commissioner to deal with the eligibility to drawback and establish identification of the export goods with the imported goods. He, further, states that specific reasons have been given inasmuch as the appellants were wrongly advised to follow ARE-1 procedure which led to non-filing of drawback shipping bill.
3. Ld. SDR, Shri Parmod Kumar supports the impugned order. He states that the identification of the imported and export goods is of paramount importance for granting any drawback of duty and that, in this case, even under the ARE-1 procedure, there is no examination report recorded either by Customs or the Excise authorities from which it can be established that identity of the export and imported goods is the same. Secondly, he submits that the impugned goods were initially imported under the DFRC scheme without any payment of duty and, therefore, question of claiming any drawback of duty on export of such goods would not arise. In reply, ld. Advocate states that there is a Board circular under which for export of goods imported under DFRC scheme, duty credit certificate is required to be allowed, though he is not readily able to produce the copy of the Boards circular.
4. After hearing both sides, I find that the proviso to Rule 4 of the Re-Export of Imported Goods (Drawback of Customs Duties) Rules, 1995 vests the Commissioner with the discretion to exempt an exporter from the provisions of clause (a) of Rule 4 for reasons to be recorded and also on his satisfaction that non-fulfillment of the conditions were beyond the control of the exporter. Hence, essentially, the proviso to Rule 4 contains discretionary power to be exercised by the jurisdictional Commissioner which he has exercised in not allowing the conversion. I also find that the jurisdictional Commissioner has taken into account the fact that identity of the export goods and imported goods could not be established at the time of export as free shipping bill was submitted and, as pointed out by ld. SDR, even the evidence available on the ARE-1 does not disclose any examination either by Customs or the Excise officials from which it can be concluded that the impugned goods were identical. In the absence of such an establishment of the identity, it is difficult to see how drawback can be sanctioned in such a case. It is also seen that the impugned goods were taken straight away from the dealer for export and they were not at all manufactured and hence there was no question of claiming of excise duty rebate under ARE-1 procedure when goods were produced abroad. Considering all aspects of the case, the jurisdictional Commissioner has exercised his discretion in not allowing conversion of free shipping bill to drawback shipping bill. It is also apparent that even if such a conversion is allowed, it would be a futile exercise as no drawback can be sanctioned unless the identity of the imported and export goods can be established. Hence, I am of the view that the impugned order passed by the jurisdictional Commissioner does not require any interference. Accordingly, the appeal is dismissed.
(Dictated and pronounced in open court) (Dr. CHITTARANJAN SATAPATHY) TECHNICAL MEMBER gs 5