Madras High Court
M/S The Kadri Mills (Cbe) Ltd vs Union Of India on 3 March, 2016
Author: M.Duraiswamy
Bench: M.Duraiswamy
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.03.2016 CORAM THE HON'BLE Mr. JUSTICE M.DURAISWAMY W.P.No.37161 of 2015 M/s The Kadri Mills (Cbe) Ltd., Unit of Kadri Woven's, SIPCOT Industrial Growth Estate, P.V.Palayam (Post), Perundurai, Erode (Dist.), Tamil Nadu 638 052 rep by B.Sri Hari Prasad, Whole time Director/Authorised Signatory ... Petitioner Vs. 1.Union of India, rep by Revenue Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi 110 001. 2.Government of India, rep by Joint Secretary, Department of Revenue, Ministry of Finance, Government of India, 14, HUDCO Vishala Building, B-Wing, Sixth Floor, Bhikaji Cama Place, New Delhi 110 001. 3.The Central Board of Excise and Customs, rep by Chairman, 153, North Block, New Delhi 110 001. 4.The Commissioner of Central Excise, No.1, Foulks Compound, Anai Medu, Salem 636 001. 5.The Commissioner of Central Excise Appeals, No.1, Foulks Compound, Anai Medu, Salem 636 001. 6.The Assistant Commissioner of Central Excise, Erode I Division, No.81, Bharathi Nagar, Erode 638 004. ... Respondents Petition filed under Article 226 of The Constitution of India praying to issue a writ of certiorarified mandamus to call for the records comprised in impugned order No.22/2015-CX dated 27.07.2015 on the file of the 2nd respondent and quash the same and consequently, direct the 6th respondent to sanction the rebate in cash. For Petitioner : Mr.S.Durairaj For Respondents : Mr.V.Sundareswaran, Standing Counsel O R D E R
The petitioner has filed the above Writ Petition to issue a writ of certiorarified mandamus to call for the records in impugned order dated 27.07.2015 on the file of the 2nd respondent and to quash the same and consequently, to direct the 6th respondent to sanction the rebate in cash.
2.It is the case of the petitioner that they are manufacturers and exporters of Textile products and that they were an 100% EOU Unit till 08.02.2011. Further, the petitioner has stated that till this period no drawback was claimed on the goods exported. After becoming a DTA unit, they exported manufactured goods (Tariff Item 630101 and 630201) by utilizing the capital goods credit and input service credit earned during the non-drawback period. According to the petitioner, this input service credit was eligible under Rule 5 of the Cenvat Credit Rules, 2004. The petitioner was also granted higher rate of drawback dated 22.09.2011 since they had not availed the cenvat credit of input and input services used in manufacture of export goods as stipulated in the said notification. Subsequently, the petitioner applied for rebate under Notification No.19/2004-CE (NT) dated 06.09.2004, an amount of Rs.81,315/- was granted in cash and re-credit of Rs.20,80,124/- was granted on the ground that the petitioner had availed higher rate of drawback. According to the petitioner, the same is not sustainable for the reason that the uniform rate of drawback has been prescribed on 630101 (i.e.) there is no higher or lower rate of drawback and only capital goods credit and input service credit earned prior to drawback period was utilized.
3.Mr.V.Sundareswaran, learned Standing Counsel for the respondents submitted that the petitioner had claimed higher rate of drawback on the exported goods comprising of customs, central excise and service tax portion and hence, rebate of duty paid on the export goods would result in double benefit. Further, in the counter filed by the respondents, it has been stated that the petitioner had availed input service tax credit to the tune of Rs.1,28,912/- E.Cess of Rs.2,579/- and SHE Cess of Rs.1,289/- on the input services used for the impugned exported goods and subsequently paid back the same. Further, the respondents have stated that by Circular dated 03.01.2003, it was clarified that the duty paid through actual credit or deemed credit account on the goods exported must be refunded. According to the respondents, this circular is applicable where rebate is eligible in the normal course. In the present case, the duty amount paid was not granted in rebate in cash but was ordered for re-credit in the cenvat credit account on the ground that if rebate is paid in cash, the same would lead to doubt benefit for the reason that the drawback availed on the customs, central excise and service tax portions.
4.The petitioner after clearing the goods on payment of duty under claim for rebate should not have claimed drawback for the central excise and service tax portion for claiming rebate. The petitioner should have paid back the drawback portion availed before claiming rebate. However, this was not done by the petitioner.
5.Mr.V.Sundareswaran, learned Standing Counsel for the respondents submitted that the issue involved in the present Writ Petition is covered by the decision of this Court made in W.P.No.1226 of 2016 dated 19.02.2016 wherein it has been stated as follows:
14.As per the proviso to Rule 3 of Customs, Central Excise Duties and Service Tax Drawback Rules 1995, a drawback may be allowed on the export of goods at such amount, or at such rates, as may be determined by the Central Government provided that where any goods are produced or manufactured from imported materials or excisable materials or by using any taxable services as input services, on some of which only the duty or tax chargeable thereon has been paid and not on the rest, or only a part of the duty or tax chargeable has been paid; or the duty or tax paid has been rebated or refunded in whole or in part or given as credit, under any of the provisions of the Customs Act, 1962 and the rules made thereunder, or of the Central Excise Act, 1944 and the rules made thereunder or of the Finance Act, 1994 and the rules made thereunder, the drawback admissible on the said goods shall be reduced taking into account the lesser duty or tax paid or the rebate, refund or credit obtained.
...
16.In the case on hand, the benefits claimed by the petitioners are covered under two different statutes one under Customs, Central Excise Duties and Service Tax Drawback Rules 1995 under Section 75 of the Customs Act, 1962 and the other under Rule 18 of the Central Excise Rules, 2002. Since the issue, involved in the present writ petition, is covered under two different statutes, the judgment relied upon by the learned counsel for the petitioner is not applicable to the facts of the present case.
17.As per the proviso to Rule 3 of the Central Excise Duties and Service Tax Drawback Rules 1995, the petitioner is not entitled to claim both the rebates.
6.On a perusal of the order passed in W.P.No.1226 of 2016, it is clear that the benefits claimed by the petitioner are covered under three different statutes under the Customs, Central Excise Duties and Service Tax Drawback Rules. As per the proviso to Rule 3 of the Central Excise Duties and Service Tax Drawback Rules, 1995, the petitioner is not entitled to claim both the rebates.
7.As stated by the learned Standing Counsel appearing for the respondents, the issue involved in the present Writ Petition is covered by the decision made in W.P.No.1226 of 2016. When the petitioner had availed the duty drawbacks on Customs, Central Excise and Service Tax on the exported goods, they are not entitled for rebate under the Central Excise rules by way of cash payment as it would result in double benefit.
8.In these circumstances, I am of the view that the Writ Petition is devoid of merits and the same is liable to be dismissed. Accordingly, the Writ Petition is dismissed. No costs.
Index : No 03.03.2016
Internet : Yes
va
To
1.The Revenue Secretary,
Union of India, Ministry of Finance,
Department of Revenue,
North Block, New Delhi 110 001.
2.The Joint Secretary,
Government of India,Department of Revenue,
Ministry of Finance, Government of India,
14, HUDCO Vishala Building,
B-Wing, Sixth Floor, Bhikaji Cama Place,
New Delhi 110 001.
3.The Chairman,
Central Board of Excise and Customs,
153, North Block, New Delhi 110 001.
4.The Commissioner of Central Excise,
No.1, Foulks Compound,
Anai Medu, Salem 636 001.
5.The Commissioner of Central Excise Appeals,
No.1, Foulks Compound,
Anai Medu, Salem 636 001.
6.The Assistant Commissioner of Central Excise,
Erode I Division, No.81, Bharathi Nagar,
Erode 638 004.
M.DURAISWAMY, J.
va
W.P.No.37161 of 2015
03.03.2016