RUBFILA INTERNATIONAL LTD. Vs. COMMISSIONER OF CUSTOMS, COCHIN

JUDGEMENT

(1.) IN the impugned order, the Commissioner of Customs, Cochin held that the appellants are not eligible for Drawback in respect of 21 shipping bills filed by them for a total amount of Rs. 77,97,236/ -. Further, he has imposed a penalty of Rs. 5 lakhs on the appellants under Section 114(iii) of the Customs Act, 1962.

(2.) THE brief facts of the case are as follows : The appellants are the regular exporters of Heat Resistant Latex Rubber Thread through Cochin port. For the period from 7 -5 -2002 to 3 -2 -2003, they exported the goods under claim for Drawback. There were in all 22 shipping bills. The total amount claimed was Rs. 78,10,667/ -. The drawback rates were as mentioned in the Drawback Schedule (Sl. Nos. 40.05 and 40.06). There was intelligence that the appellants were claiming Duty Drawback on the basis of wrong declaration inasmuch as the export product suffers only negligible duty incidence on the materials used and substantial portion of the materials is indigenously produced on which no duty is paid. 97% by weight of the export product is constituted by Natural Rubber. The appellants used to import Natural Rubber without payment of duty under Advance Licensing Scheme. However, the Government banned the import of Natural Rubber under Advance Licensing Scheme since 1999. The appellants had to import the rubber on payment of Customs duty. Hence, they represented to the Government of India for fixing All Industry Rates on their export product, which is Heat Resistant Latex Rubber Thread. While requesting the Government for fixation of the All Industry Rate, the appellants furnished details of imported/indigenous materials consumed and the incidence of duty on them. After May, 2002, they did not import any rubber at all. In other words, they manufactured their export product after procuring rubber from indigenous sources. Natural rubber is not at all excisable. This indicates that 97% of the inputs of their export product has not suffered any duty at all. However, the Government has fixed the All Industry Rate taking into account the incidence of Customs duty on the imported rubber. The Department proceeded against the appellants and the Adjudicating Authority passed the impugned order denying the Drawback claim. The appellants strongly challenge the impugned order.

(3.) SHRI S. Jai Kumar, the learned Advocate appeared for the Appellants and Smt. Shobha L. Chary, the learned JCDR for the Revenue. The learned Advocate adduced the following arguments :