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M/s. Bishan Saroop Kishan Agro Industries (P) Ltd., SLV Industrial Estate, Bangalore & Others v/s The Customs, Excise and Service Tax, Appellate Tribunal, South Zonal Bench, Chennai & Another


Company & Directors' Information:- K. N. C. AGRO LIMITED [Active] CIN = U01500WB2005PLC102657

Company & Directors' Information:- F AND K AGRO PRIVATE LIMITED [Active] CIN = U01111PN1980PTC014563

Company & Directors' Information:- R K B AGRO INDUSTRIES LIMITED [Active] CIN = L17100KA1979PLC003492

Company & Directors' Information:- R T AGRO PRIVATE LIMITED [Active] CIN = U15400MH1988PTC122934

Company & Directors' Information:- N M AGRO PRIVATE LIMITED [Active] CIN = U15209DL2000PTC103461

Company & Directors' Information:- K F AGRO PRIVATE LIMITED [Active] CIN = U01132PB1998PTC021937

Company & Directors' Information:- CHENNAI SOUTH INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U51900TN2011PTC081632

Company & Directors' Information:- T K M AGRO LIMITED [Active] CIN = U01119TZ2000PLC009159

Company & Directors' Information:- J R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15342UP1982PTC005792

Company & Directors' Information:- B M AGRO INDUSTRIES LIMITED [Active] CIN = U74899DL1992PLC049988

Company & Directors' Information:- R S AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15319DL1998PTC097025

Company & Directors' Information:- S N T AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U01122DL1997PTC086925

Company & Directors' Information:- M S AGRO PRIVATE LIMITED [Active] CIN = U01403WB2011PTC163653

Company & Directors' Information:- S K K AGRO PRIVATE LIMITED [Active] CIN = U01110DL2007PTC163157

Company & Directors' Information:- D D AGRO INDUSTRIES LIMITED [Active] CIN = U24219PB1999PLC022487

Company & Directors' Information:- P N AGRO PVT LTD [Active] CIN = U01401WB1992PTC056261

Company & Directors' Information:- KISHAN AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15319BR2007PTC013086

Company & Directors' Information:- B R V AGRO PRIVATE LIMITED [Strike Off] CIN = U15139UP2007PTC034299

Company & Directors' Information:- A A AND A AGRO LIMITED [Converted to LLP] CIN = U01111DL1986PLC025101

Company & Directors' Information:- S S D AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100MH1998PTC113744

Company & Directors' Information:- B. P AGRO INDIA PRIVATE LIMITED [Active] CIN = U15132DL2019PTC357421

Company & Directors' Information:- M Y AGRO PRIVATE LIMITED [Active] CIN = U51221DL2011PTC215043

Company & Directors' Information:- S. A. B. INDIA AGRO INDUSTRIES LIMITED [Active] CIN = U01403UP2009PLC038365

Company & Directors' Information:- U K AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15114UP2003PTC028107

Company & Directors' Information:- H R D AGRO PRIVATE LIMITED [Active] CIN = U15490PB2006PTC030412

Company & Directors' Information:- R. K. AGRO INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U15410WB2012PTC180269

Company & Directors' Information:- C F L AGRO PRIVATE LIMITED [Strike Off] CIN = U01409KA2001PTC028797

Company & Directors' Information:- R J AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15311KA2005PTC035485

Company & Directors' Information:- S O I AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15310GJ2010PTC059966

Company & Directors' Information:- L K AGRO PRIVATE LIMITED [Active] CIN = U15140MH1998PTC115185

Company & Directors' Information:- H D AGRO PRIVATE LIMITED [Strike Off] CIN = U01111MH1996PTC097451

Company & Directors' Information:- P C L AGRO PRIVATE LIMITED [Active] CIN = U74899DL1992PTC049537

Company & Directors' Information:- A S AGRO PRIVATE LIMITED [Active] CIN = U74899DL1989PTC040467

Company & Directors' Information:- S N N AGRO PRIVATE LIMITED [Active] CIN = U01114JH2016PTC008919

Company & Directors' Information:- R R S AGRO PRIVATE LIMITED [Strike Off] CIN = U15139DL2010PTC209756

Company & Directors' Information:- S I P AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01403WB2012PLC188362

Company & Directors' Information:- AGRO PRIVATE LIMITED [Strike Off] CIN = U51101KA1962PTC001475

Company & Directors' Information:- S. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15490PN2013PTC146574

Company & Directors' Information:- D. J. AGRO PRIVATE LIMITED [Strike Off] CIN = U01112DL1994PTC057414

Company & Directors' Information:- G A AGRO PRIVATE LIMITED [Active] CIN = U01229KL2002PTC015736

Company & Directors' Information:- M K B AGRO PRIVATE LIMITED [Active] CIN = U01100MH1996PTC101802

Company & Directors' Information:- T D K AGRO PRIVATE LIMITED [Active] CIN = U29190BR1991PTC004486

Company & Directors' Information:- S G AGRO PRIVATE LIMITED [Active] CIN = U01122KA1995PTC017091

Company & Directors' Information:- J J AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15130MH1980PTC023302

Company & Directors' Information:- A R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC050526

Company & Directors' Information:- AGRO INDIA PRIVATE LIMITED [Active] CIN = U01407AR2013PTC008381

Company & Directors' Information:- U & V AGRO PRIVATE LIMITED [Active] CIN = U01403TZ2015PTC021823

Company & Directors' Information:- B A B AGRO LTD [Strike Off] CIN = U24231MH1993PLC073114

Company & Directors' Information:- G S AGRO INDUSTRIES PVT LTD [Active] CIN = U01132WB1990PTC049960

Company & Directors' Information:- D V AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC051892

Company & Directors' Information:- B A B AGRO LTD [Active] CIN = U24233WB1987PLC043179

Company & Directors' Information:- B C M AGRO PRIVATE LIMITED [Active] CIN = U01119WB1999PTC090308

Company & Directors' Information:- K. K. AGRO PVT. LTD. [Strike Off] CIN = U51420WB1987PTC042090

Company & Directors' Information:- H & W AGRO PRIVATE LIMITED [Strike Off] CIN = U01400MH2012PTC238144

Company & Directors' Information:- K D AGRO PRIVATE LIMITED [Converted to LLP] CIN = U15312DL2005PTC131996

Company & Directors' Information:- H R AGRO PRIVATE LIMITED [Active] CIN = U01119PB1995PTC016403

Company & Directors' Information:- C K N AGRO PRIVATE LIMITED [Active] CIN = U01300KL2020PTC064742

Company & Directors' Information:- P AND G AGRO INDUSTRIES P LTD [Strike Off] CIN = U99999UP1985PTC007509

Company & Directors' Information:- R. K. G. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100UP2017PTC097391

Company & Directors' Information:- A Q AGRO PVT LTD [Under Process of Striking Off] CIN = U51209WB2006PTC109930

Company & Directors' Information:- S E AGRO PRIVATE LIMITED [Active] CIN = U52500AP2016PTC103446

Company & Directors' Information:- SLV INDUSTRIES PRIVATE LIMITED [Active] CIN = U25209TG2019PTC136003

Company & Directors' Information:- S U B AGRO PRIVATE LIMITED [Active] CIN = U24129PN2000PTC015404

Company & Directors' Information:- A S G AGRO LIMITED [Strike Off] CIN = U01119HR2004PLC035459

Company & Directors' Information:- T & T AGRO PRIVATE LIMITED [Active] CIN = U01132WB1999PTC090368

Company & Directors' Information:- C L AGRO PRIVATE LIMITED [Strike Off] CIN = U74120UP2012PTC051898

Company & Directors' Information:- P M S AGRO PVT LTD [Strike Off] CIN = U29211PB1994PTC014448

Company & Directors' Information:- B R K AGRO PRIVATE LTD [Strike Off] CIN = U29211PB1994PTC014302

Company & Directors' Information:- R E I AGRO LTD. [Active] CIN = U01111WB1994PLC065082

Company & Directors' Information:- V G AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01400DL1993PLC051666

Company & Directors' Information:- P & S AGRO INDIA LIMITED [Strike Off] CIN = U01403MH2011PLC214782

Company & Directors' Information:- D N D AGRO (INDIA) LIMITED [Active] CIN = U01403PN2011PLC139235

Company & Directors' Information:- L C A AGRO PRIVATE LIMITED [Strike Off] CIN = U01112UP2005PTC029657

Company & Directors' Information:- V M G AGRO INDIA LIMITED [Active] CIN = U01100MP2011PLC026434

Company & Directors' Information:- G D AGRO PRIVATE LIMITED [Strike Off] CIN = U24122UP1993PTC015164

Company & Directors' Information:- P B AGRO PRIVATE LIMITED [Amalgamated] CIN = U26960MH1990PTC057137

Company & Directors' Information:- S R A AGRO SERVICE INDIA PRIVATE LIMITED [Strike Off] CIN = U51909TZ2002PTC010346

Company & Directors' Information:- R A P AGRO INDIA PVT LTD [Strike Off] CIN = U14200WB2006PTC107514

Company & Directors' Information:- S K S INDUSTRIAL SERVICE PRIVATE LIMITED [Active] CIN = U93030UP2013PTC058166

Company & Directors' Information:- G T AGRO INDIA PRIVATE LIMITED [Strike Off] CIN = U74899DL2005PTC142577

Company & Directors' Information:- F AND K AGRO PVT LTD [Strike Off] CIN = U29248PN1980PTC022759

Company & Directors' Information:- T S AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U15209UP1987PTC008974

Company & Directors' Information:- E M AGRO (INDIA) PRIVATE LIMITED [Strike Off] CIN = U02001UP1997PTC022261

Company & Directors' Information:- J S AGRO PRIVATE LIMITED [Strike Off] CIN = U01300PB1993PTC013943

Company & Directors' Information:- A N AGRO PRIVATE LIMITED [Strike Off] CIN = U01119DL1996PTC081855

Company & Directors' Information:- V R L AGRO PRIVATE LIMITED [Strike Off] CIN = U85110KA1999PTC024717

Company & Directors' Information:- B AND P AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U01110MH1972PTC015574

Company & Directors' Information:- P. S. R. AGRO PRIVATE LIMITED [Active] CIN = U24248UP1974PTC004017

Company & Directors' Information:- O N AGRO PRIVATE LIMITED [Active] CIN = U74899DL1988PTC031986

Company & Directors' Information:- P V R K AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U01119AP1988PTC008395

Company & Directors' Information:- K R S AGRO PRIVATE LIMITED [Strike Off] CIN = U01400PN2011PTC141711

Company & Directors' Information:- J K AGRO PRIVATE LIMITED [Strike Off] CIN = U74900PY2011PTC002548

Company & Directors' Information:- W B S AGRO PRIVATE LIMITED [Active] CIN = U01122PB2003PTC025879

Company & Directors' Information:- K R P AGRO INDUSTRIES PVT LTD [Active] CIN = U01110MH1991PTC062304

Company & Directors' Information:- G T M AGRO PRIVATE LIMITED [Strike Off] CIN = U01100MH2005PTC150816

Company & Directors' Information:- Y K AGRO PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U74999DL2013PTC250398

Company & Directors' Information:- N P M AGRO PRIVATE LIMITED [Strike Off] CIN = U15494DL2011PTC214942

Company & Directors' Information:- B L B AGRO PRIVATE LIMITED [Strike Off] CIN = U51200DL2012PTC244511

Company & Directors' Information:- D A AGRO PRIVATE LIMITED [Active] CIN = U74900DL2015PTC288168

Company & Directors' Information:- SLV INDUSTRIES INDIA PRIVATE LIMITED [Active] CIN = U24304AP2016PTC103320

Company & Directors' Information:- D. B. AGRO PRIVATE LIMITED [Active] CIN = U01100MP2010PTC025035

Company & Directors' Information:- INDUSTRIAL SERVICE LIMITED [Strike Off] CIN = U99999MH1937PTC002705

    C.M.A. Nos. 1804, 1811, 1813 & 1820 of 2019 & C.M.P. Nos. 5877 & 5937 of 2019

    Decided On, 06 June 2019

    At, High Court of Judicature at Madras

    By, THE HONOURABLE DR. JUSTICE VINEET KOTHARI & THE HONOURABLE MR. JUSTICE C.V. KARTHIKEYAN

    For the Appellants: V. Srikanth, Advocate. For the Respondents: R1 & R2, M/s. R. Hemalatha, Senior Standing Counsel, R2, M/s. S.R. Sundar, Advocate.



Judgment Text

(Prayer: Civil Miscellaneous Appeals filed under Section 130 of the Customs Act, 1962, to consider the above substantial questions of law and all the appeal by setting aside the impugned final order Nos. 40836, 40834, 40833 & 40835/2018 dated 16.03.2018 passed by the Honourable CESTAT, Chennai.)

Dr. Vineet Kothari, J.

1. C.M.A.No. 1804 of 2019 has been filed by the manufacturer M/s. Bishan Saroop Kishan Agro Industries (P) Ltd., and the connected Appeals in C.M.A.Nos. 1811 7 1813 of 2019 have been filed by the exporter M/s. Big Bags International Private Limited and C.M.A.No. 1820 of 2019 has been filed by Shri Ravish Kamath.

2. The appellants are aggrieved by the Order dated 16.03.2018 passed by the learned CESTAT whereby the learned CESTAT held that the exporter M/s. Big Bags International Private Limited was not entitled to custom duty draw back at higher All Industry Rate (AIR rate) for the reason that for the bags purchased by it, which were manufactured by M/s. Bishan Saroop Kishan Agro Industries (P) Ltd., the said manufacturer M/s. Bishan Saroop Kishan Agro Industries (P) Ltd., had availed Cenvat credit under the relevant excise rules and in view of such Cenvat credit having been availed by the manufacturer, the exporter M/s. Big Bags International Private Limited was not entitled to the higher duty draw back in terms of Clause 13 of the Notification No. 103/2008- Cus (NT) dated 29th August 2008.

3. The purpose and reason for not allowing the higher rate duty draw back of custom duty is not to allow the double benefit in the hands of the exporter, since the manufacturer of those goods had already availed the Cenvat credit under the relevant Excise law. The relevant portion of the impugned order passed by the learned Tribunal is quoted below for ready reference:-

“7. The dispute is with reference to the draw back which is allowable under the Air for FIBCS exported by the appellants. As per the facts of the case, the appellant has procured the export goods from other manufacturers, on payment of duty. The manufacturers in turn have availed Cenvat credit and using the same have paid the duty on the goods sold to the appellants. Such goods in turn were exported by the appellant under claim for drawback under AIR. The dispute is whether the appellants will be entitled to AIR only for the customs component (in case Cenvat credit was used) or for the higher rate including the excise as well as customs components, as has been claimed and paid by the appellants.

8. The appellant has specifically relied on the CBEC Circular No. 16/2009- Cus. dated 25.054.2009, which has clarified the rate of duty drawback payable to the merchant exporters. The relevant para of the circular relied by the appellant is reproduced as below:-

“7. In view of the above, the Board has decided to accept the recommendation of the Drawback Committee in this regard. Thus merchant exporters who purchase goods from the local market for export shall henceforth be entitled to full rate of duty drawback (including the excise portion). However, such merchant exporters shall have to declare at the time of export, the name and address of the trader from whom they have purchased the goods. They shall also have to declare that no rebate (input rebate and also the final product rebate) shall be taken against the Shipping Bills under which they are exporting the goods. The merchant exporters who purchase goods from traders may therefore furnish the declaration, at the time of export, in the format annexed with this circular. This is issued in supersession of para (vi) of Circular No. 64/98- Cus. Dated 01.09.1998.”

After perusing the Circular and paragraph- 7 of the above circular, it is easily seen that the circular has clarified the payment of drawback in respect of the goods which are purchased by merchant exporters from traders in the local market. There is a presumption that the goods available in the market are deemed to be duty paid. But in the facts of the present case, it is evident that the appellant has not procured the export goods from any trader in the market but directly from the manufacturer who has paid the central excise duty on such goods by availing Cenvat credit.

9. We have perused the Notification No. 103/2008- Cus (NT) dated 28.08.2008 in which the Air for drawback for the period 2008- 09 was notified. The relevant condition of the Notification is reproduced as under:-

“No.13. The expressions “when Cenvat facility has not been availed”, used in the said schedule, shall mean that the exporter shall satisfy the following conditions, namely:-

(i) The exporter shall declare, and if necessary, establish to the satisfaction of the Assistant Commissioner of Customs or Assistant Commissioner of Central Excise or Deputy Commissioner of Customs or Deputy Commissioner of Central Excise, as the case may be, that no Cenvat facility has been availed for any of the inputs or input services used in the manufacture of the export products.”

The term “Cenvat credit has not been availed” has been explained to mean that no Cenvat facility has been availed for any of the inputs or input services used in the manufacture of the export products. This is evidently in relation to the manufacture of the goods which in the present case is manufactured by M/s. Bishen Saroop Ram Kishen Agro Pvt. Limited. Since the manufacturer has availed the benefit of Cenvat credit and the same is not in dispute, we are of the view that the appellant will not be entitled to the excise portion of AIR. In view of the above, we find no reason to interfere with the impugned order and the same is sustained. All the appeals are rejected.”

4. The learned counsel for the appellant Mr.V.Srikanth urged before us that the exporter M/s. Big Bags International Private Limited had not claimed any Cenvat credit in his own hands and therefore, the benefit of duty draw back at higher AIR rate which was earlier given to the Assessee/Appellant could not have been withdrawn by the respondent Department authorities. He further drew our attention to another Circular No. 16/2009- Cus dated 25th May 2009 applicable to the merchant exporter purchasing the goods from open market, which were deemed to be duty paid and higher duty draw back was allowed for such cases vide paragraph 6 of the said Circular. He therefore submitted that on a parity of reasoning, the respondent authorities were bound to allow higher duty draw back to the appellants well. He further submitted that the learned Tribunal had erred in not deciding the exact duty draw back allowable in the hands of the Assessee/appellant, M/s. Big Bags International Private Limited as also the issue of penalty imposed against the appellants herein including the Manufacturer and the CEO of the merchant exporter. It was urged that therefore, the Tribunal should be directed to decide the issues so far not decided by it.

5. The learned counsel for the respondent Department supported the impugned order.

6. We have heard the learned counsels.

7. In our considered opinion, there is no error in the order impugned passed by the learned Tribunal. The purpose of allowing the reduced duty draw back in the hands of the merchant exporter unless he fails to satisfy the authorities of the department that no CENVAT facility has been availed by the manufacturer in respect of the goods exported by the merchant exporter, is to avoid a double benefit in the hands of the exporter/manufacturer of those goods. The duty draw back is allowed for giving incentive to the export to the extent of Excise component only to the extent of Excise duty actually suffered by the goods in question. If the Cenvat credit is availed by the manufacturer of such goods, in respect of Excise duty paid on the raw materials or inputs for manufacture of those goods, then the duty draw back is liable to be reduced under the Notification in question, namely, Notification No.103 of 2008 dated 29th August 2008 which is applicable to the facts of the present case.

8. Since admittedly the appellant M/s. Big Bags International Private Limited in the present case has not purchased the bags in question from the open market but has purchased the same from the manufacturer M/s. Bishan Saroop Kishan Agro Industries (P) Ltd., directly, who has been granted Cenvat credit in respect of the bags in question, the duty draw back available to the exporter was liable to be reduced to that extent. Clause 13 of the said Notification is relevant, which has been quoted by the learned Tribunal also and has been quoted by us above. Clause (I) of the said Clause 13 quoted above clearly requires even the Exporter to satisfy the authority concerned that none of the credit facility has been availed for any of the inputs or services used in the manufacture of the bags in question. In the absence of any proof of such non availment of Cenvat credit by the manufacturer, obviously the appellant/merchant exporter was therefore entitled only to get the reduced dut

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y draw back after deducting the amount of Cenvat Credit availed by the manufacturer. We hold that this finding of the learned Tribunal, is perfectly in consonance with the terms of the notification in question. There is no error in the same. 9. The parity of reasoning sought and drawn by the learned counsel for the appellants with the subsequent notification where the goods have purchased from the open market is not applicable to the facts of the present case. The Appeal, therefore in our opinion, has no merit and deserves to be dismissed. However to the extent of the issues raised before the Tribunal but not decided, we leave it open to the appellants/Assessees to approach the Tribunal once again by way of suitable application or review petition which we expect the learned Tribunal to decide on merits and in accordance with law. 10. With these observations and liberty, these Civil Miscellaneous Appeals are dismissed. No costs. Consequently, connected Miscellaneous Petitions are closed.
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