Case Note & Summary
The petitioner, Alfa Laval (India) Ltd., filed a Writ Petition under Article 226 of the Constitution of India challenging a Circular dated 30th December 2011 issued by the Central Board of Excise and Customs (CBEC). The Circular clarified that an exporter cannot claim the Brand Rate of drawback under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 after having availed the All Industry Rate of drawback under Rule 3. Consequently, the petitioner also challenged the Order-in-Appeal dated 27th September 2012 passed by the Commissioner of Central Excise (Appeals) and certain letters/orders issued by the Additional Commissioner (BRU) of Central Excise, Pune-I, which rejected the petitioner's applications for Brand Rate determination based on the Circular. The short question for consideration was whether the petitioner, having claimed and been granted drawback at the All Industry Rate under Rule 3 at the time of export, was entitled to subsequently apply for determination of Brand Rate under Rule 7 and claim the differential amount. The respondents raised a preliminary objection regarding maintainability, arguing that the petitioner had not exhausted the alternate remedy under section 129DD of the Customs Act, 1962. The Court noted that the Circular itself could not be challenged under the Act and that the orders impugned were based on the Circular. It held that availability of alternate remedy is not an absolute bar to writ jurisdiction, especially when the Circular is under challenge. On merits, the Court examined Rules 3 and 7 of the Drawback Rules. Rule 3 provides for All Industry Rate of drawback fixed by the Government, while Rule 7 allows an exporter to apply for determination of Brand Rate if the All Industry Rate is not applicable or if the exporter desires a higher rate. The Court found that there is no provision in the Drawback Rules that prohibits an exporter from claiming Brand Rate after having availed All Industry Rate. The Circular dated 30.12.2011, which purported to clarify otherwise, was held to be contrary to the statutory rules and therefore ultra vires. The Court quashed the Circular and the consequential orders, allowing the writ petition.
Headnote
A) Customs Law - Drawback - Brand Rate vs All Industry Rate - Rules 3 and 7 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - The issue was whether an exporter who availed All Industry Rate drawback under Rule 3 can later apply for Brand Rate under Rule 7. The Court held that Rule 7 is an independent provision and there is no bar in the rules preventing an exporter from claiming Brand Rate after having availed All Industry Rate. The CBEC Circular dated 30.12.2011 which clarified otherwise was held to be contrary to the rules and therefore quashed. (Paras 3, 10-12) B) Constitutional Law - Writ Jurisdiction - Alternate Remedy - Article 226 of Constitution of India - The respondents raised a preliminary objection that the petitioner had not exhausted alternate remedy under section 129DD of the Customs Act, 1962. The Court held that availability of alternate remedy is not an absolute bar to entertain a writ petition, especially when the impugned Circular could not be challenged under the Act. Since the Circular was the basis for the orders, the writ petition was maintainable. (Paras 4-5)
Issue of Consideration
Whether an exporter who has claimed and been granted drawback at the All Industry Rate under Rule 3 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 is entitled to subsequently apply for determination of Brand Rate of drawback under Rule 7 and claim the differential amount.
Final Decision
The Court allowed the writ petition, quashed the Circular dated 30.12.2011 to the extent it clarified that an exporter cannot claim Brand Rate after availing All Industry Rate, and also quashed the consequential orders dated 19.04.2012, 11.06.2012, 24.07.2012, and 27.09.2012. Rule made absolute.
Law Points
- Alternate remedy not an absolute bar to writ jurisdiction
- Circular cannot override statutory rules
- Brand Rate of drawback can be claimed after All Industry Rate
- Rule 7 of Drawback Rules is independent of Rule 3
