Page 103 - ELT_1st July 2020_Vol 373_Part 1

2020 ] GTN TEXTILES LIMITED v. SECRETARY, M.F. (D.R.), NEW DELHI 13

EOU/EPZ. In a situation, where parts of the process are carried out in different locations,
one can hardly conclude that this operational difference would result in denial of the ben-
efit to the exporter. The original stipulation that no drawback was available for export
was imposed to ensure that no double benefit was obtained. Subsequently, when an EOU
was permitted to engage in job work, the original condition stood modified to the effect
that a manufacturer/exporter would also be entitled to drawback, provided the finished
commodity was exported from EOU/EPZ itself. A situation such as the present where the
goods revert back to the assessee for further processing has not been envisaged and is thus
not covered, though it is, in my view, also entitled to such benefit. [2011 (268) E.L.T. 185
(Kar.) relied on]. [paras 20, 21, 22, 23, 24]
Petitions disposed of
CASES CITED
Commissioner v. Karle International — 2015 (323) E.L.T. A74 (S.C.) — Referred .......................... [Para 15]
Commissioner v. L.T. Karle and Co. — 2007 (207) E.L.T. 358 (Mad.) — Referred ...... [Paras 13, 16, 17, 19]
Commissioner v. Leela Scottish Lace Ltd.
— 2011 (268) E.L.T. 185 (Kar.) — Relied on ............................................................ [Paras 14, 15, 16, 19]
First Garments Manufacturing (India) P. Ltd. v. Joint Secretary to the Government of India
— 2016 (344) E.L.T. 67 (Mad.) — Referred .......................................................................... [Paras 13, 17]
Karle International v. Commissioner — 2012 (281) E.L.T. 486 (Kar.) — Referred .................. [Paras 14, 15]
DEPARTMENTAL CLARIFICATIONS CITED
C.B.E. & C. Circular No. 67/98, dated 14-9-1998 ................................................................................. [Para 7]
C.B.E. & C. Circular No. 31/2000-Cus., dated 20-4-2000 ................................................................... [Para 10]
C.B.E. & C. Circular No. 49-Cus., dated 22-5-2000.............................................................................. [Para 11]
REPRESENTED BY : Shri G. Natarajan, for the Petitioner.
Mrs. Hema Muralikrishnan, Senior Standing Coun-
sel, for the Respondent.
[Order (Common)]. - Heard Mr. G. Natarajan, Learned Counsel for the
petitioner and Mrs. Hema Muralikrishnan, Learned Senior Standing Counsel for
the respondents.
2. The admitted facts are the petitioner manufactures and exports
ready-made garments and claims drawback of excise and customs duties paid on
the raw materials used in such manufacture. The claims had been made under
All Industry Rate (AIR). Some of the processes engaged in the manufacture, such
as ‘silicon washing’ and ‘mercerizing’ were sub-contracted by the petitioner to an
entity by name Arun Processors Limited, a 100% Export Oriented Unit (in short
‘EOU’). The EOU, after completion of the processes returned the goods for fur-
ther finishing to the petitioner, who carried out the final processing and thereaf-
ter, exported the same. Initially the petitioners’ claim for drawback was allowed.
Thereafter and invoking Notification No. 31 of 1999, dated 20-5-1999, show cause
notice dated 2-4-2003 was issued to the petitioner seeking to reverse the draw-
back granted and recover the same. Order-in-original dated 28-11-2004 was
passed confirming the demand along with interest and penalty.
3. The petitioner challenged the aforesaid order by way of appeal and
the Commissioner of Customs (Appeals), Chennai by order dated 13-5-2005 re-
jected the same. The same fate awaited the Review Petition filed by the petitioner
challenging the order of the Appellate Commissioner before the Government of
India (GOI) that dismissed the review by order dated 29-8-2006. The aforesaid
order of the GOI is challenged in W.P. No. 4846 of 2007.

EXCISE LAW TIMES  1st July 2020  103