The Calcutta High Court in the case M/s. Narendra Tea Company Private Limited Vs Union of India and Ors observed and has held that 100% Export Oriented Unit, EOU which has procured bulk tea from the manufacturer and excise duty is being entitled to avail the benefit of drawback.
The bench headed by Justice Md. Nizamuddin in the case observed that the petitioner has procured excise duty-paid tea in respect of the subject shipping bills. Thus, the sample invoices and shipping bills clearly show duty was paid on procurement by the petitioner and under such circumstances, there could be no reason to deny a drawback to the petitioner, which is an EOU.
In the present case, the petitioner or assessee is a 100% export-oriented unit, EOU. The assessee exported 22 consignments of tea and the assessee in the case claimed a duty drawback on central excise duty paid on purchases.
The court stated that it has been stated under Chapter 9 of the Foreign Trade Policy or Export and Import Policy governs the entitlement of EOUs, like the writ petitioner, to claim drawbacks at All Industry Rates, AIR.
Therefore, the petitioner who being a 100% EOU that exports tea which seek a duty drawback in accordance with the notifications, and the duty drawback was duly granted to the petitioner by the department.
The Customs Department in the case observed and has issued the show cause notice to the petitioner for recovery of the duty drawback. In the show cause notice, there was only an allegation that the relevant shipping bills were filed for the exportation of tea as stated under drawback serial No. 9.21, i.e., 9.021 and the export was done after May 31, 2000.
It was also alleged before the court that with effect from June 1, 2000, the drawback was not admissible on tea, and the same was erroneously paid by the petitioner.
The petitioner in the plea contended before the court that the petitioner, being a 100% EOU that exports tea, sought duty drawbacks in accordance with the said notifications, and the duty drawbacks were duly granted to the petitioner by the department.
On the other hand, the department contended before the court that no document has been annexed by the petitioner wherein it showed that the petitioner is the manufacturer of the product and has paid excise duty. Thus, the chartered accountant certificate is not correct and is misleading and the challans do not match the procurement made by the petitioner.
The court stated that the petitioner failed to make out a case that the petitioner is otherwise eligible to get a duty drawback and there being no such ground to interfere with the order of the revisional authority, and the writ petition should be dismissed.
The court while considering the facts and circumstances of the case observed and has held that the petitioner is entitled to avail the benefit of drawback under the notification issued by the DGFT, the Government of India, Ministry of Finance in the exercise of powers conferred as stated under paragraph 4.11 of the Export and Import Policy 1997-2002, which relates to the duty drawback for the period from June 1, 2000, to March 31, 2001.
Accordingly, the court dismissed the writ plea.
The counsel, Advocate Saurabh Bagaria appeared for the Petitioner.
The counsel, Advocate Vipul Kundalia represented the respondent.