Page 107 - ELT_1st July 2020_Vol 373_Part 1

2020 ] GTN TEXTILES LIMITED v. SECRETARY, M.F. (D.R.), NEW DELHI 17

11. The EOU/EPZ units in textiles, ready-made garments and granite sec-
tors were allowed to undertake job work on behalf of DTA units by Board’s
Circular 69/98-Cus., dated 14th September, 1998. This facility was subse-
quently extended to the EOU/EPZ units in aquaculture, animal husbandry,
hardware, software sector vide Board’s Circular No. 74/99-Cus., dated 5th
Nov., 1999. Now, it has been decided to extend this facility to EOU/EPZ
units in all sectors. Further, it has been decided that the DTA units shall be
entitled to avail of the brand rate of duty drawback for such job work un-
dertaken by EOUs/EPZ units concerned.’
12. It is the petitioners’ case, on a combined reading of the aforesaid
Notifications, that (i) the Board has permitted EOUs/units in EPZ to engage in
processing works/job works in order to optimize production capacity and (ii)
that the ultimate manufacturer/exporter is entitled to drawback claim in regard
to duty component paid on raw materials/inputs, upon proof of payment of du-
ty thereupon.
13. The petitioner relies in this regard, on a decision of the Division
Bench of this Court in the case of Commissioner of Customs, Tuticorin v. L.T. Karle
& Co. [2007 (207) E.L.T. 358] and of a Learned Single Judge of this Court in First
Garments Manufacturing (I) P. Ltd. v. Jt. Secretary to the G.O.I. [2016 (344) E.L.T. 67
(Mad.).
14. Learned Counsel for the respondents urges that a reading of the
Notifications makes it clear that the ultimate export has to be effected by the
100% EOU itself. According to her, the intention of the Notifications was never to
permit a drawback claim by a manufacturer or exporter in cases where there had
been job work carried out by EOU/units in EPZ. This is for the reason that vari-
ous concessions are available already to exports from EOU/units in EPZ and the
provision of drawback is an additional benefit not contemplated in law. She
brings to the notice of the Court two conflicting decisions of the Karnataka High
Court, one in the case of Karle International v. Commissioner of Customs, Bangalore
[2012 (281) E.L.T. 486] in favour of the assessee and an another of another Bench
of the same Court in Commissioner of Customs, Bangalore v. Leela Scottish Lace Ltd.
[2011 (268) E.L.T. 185], adverse to the assessee.
15. The decision of Karle International (supra) is dated 23-8-2011, where-
as the decision in Leela Scottish Lace Ltd. (supra) is dated 18-2-2011 but has not
been brought to the notice of the subsequent Bench. The Revenue carried in ap-
peal the decision of the Division Bench in Karle International (supra) and the De-
partmental SLP in Special Leave to Appeal (Civil) CC Nos. 6104 and 6105 of 2012
came to be dismissed by the Supreme Court on 13-4-2012 [2015 (323) E.L.T. A74
(S.C.)] in the following terms :
‘Delay condoned.
Admittedly, the decision of the Madras High Court in the case of the
respondent-assessee itself, on the same issue has not been challenged by the
Revenue. In that view of the matter, we decline to entertain these Special
Leave Petitions which are dismissed accordingly’.
16. She labours extensively on the decision of the Division Bench in
Leela Scottish Lace Ltd. (supra) drawing attention to detailed analysis of the facts
embarked upon by the Bench and the strictures passed against the Department in
regard to the non-cooperation extended by the officials therein. In conclusion, the
Bench has disagreed with the Division Bench of the Madras High Court in the

EXCISE LAW TIMES  1st July 2020  107