KADRI MILLS (CBE) LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) 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 -7 -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. 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 8 -2 -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 -9 -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. , dated 6 -9 -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.

(2.) 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 3 -1 -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 doubles benefit for the reason that the drawback availed on the Customs, Central Excise and Service Tax portions.

(3.) 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.