The Madras High Court has held that the exporters are entitled to All Industry Rate (AIR) drawback though the processing is carried out at the 100% Export Oriented Unit (EOU).
In the case of M/s GTN Textiles Ltd. vs. The Commissioner of Customs observed that where the parts of the process are carried out in different locations and it is very difficult to conclude that this operational difference would result in the denial of the benefit to the exporter. And the only purpose of the stipulation is only to ensure that no double benefit is availed.
The petitioner namely M/s GTN Textiles Ltd. is engaged in the manufacturing and export of readymade garments. The petitioner claimed the drawback of excise and customs duty paid on all the raw material pertaining to the manufacture. This claim was made under All Industry Rate (AIR). However, the claim of the petitioner was denied by the respondent on the grounds that the petitioner is carrying out the processing at the unit which is 100% Export Oriented Unit (EOU) and by an order asked the petitioner to reverse the drawback granted and recover the same.
The issue raised in this case was whether the exporter is entitled to All Industry Rate (AIR) drawback though the processing is carried out at the 100% Export Oriented Unit (EOU) or not?
The single bench of High Court of Madras comprised of Justice Anita Sumanth held that where the parts of the process are carried out in different locations and it is very difficult to conclude that this operational difference would result in the denial of the benefit to the exporter. And the only purpose of the stipulation is only to ensure that no double benefit is availed. Therefore, the exporters are entitled to All Industry Rate (AIR) drawback though the processing is carried out at the 100% Export Oriented Unit (EOU).
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