2005 (12) TMI 338 - AT - Customs

Summary

Issues: Recovery of drawback amount

The judgment dealt with an appeal against the recovery of a drawback amount of approximately Rs. 97 lakhs. The appellant had exported ready-made garments during 1995-97 to the USA and Europe, with total exports declared over Rs. 23 crores. The Directorate General of Revenue Intelligence initiated proceedings under a show cause notice due to alleged non-receipt of payments in foreign exchange, leading to the demand for recovery of the drawback amount. The appellant's explanation regarding non-acceptance of some consignments by buyers and subsequent resale of goods was not accepted by the Commissioner, who raised concerns about the timing and pricing of these sales.

The appellant's counsel argued that the Commissioner's observations were unfounded, emphasizing that the goods were resold periodically, not after five years as suggested. The appellant's bank confirmed advance remittances export-wise to the investigating authorities, with no disputes raised regarding the connection between remittances and exported goods. The Tribunal noted that the bank had provided details of foreign exchange remittances to the appellant, indicating that the remittances were for the exported goods. The Tribunal found no misstatement or fraud by the appellant, attributing the issue to delayed receipt of export proceeds, which was adequately explained and supported by the bank's confirmation.

The Tribunal referred to Rule 16A of the Drawback Rules, which governs the recovery of drawback amounts when export proceeds are not realized. The rule allows for the restoration of drawback amounts if payments for export consignments are received after the initial drawback amount is returned. In this case, as there was no misstatement or fraud, and the delay in receiving export proceeds was justified and confirmed by the bank, the Tribunal concluded that the Commissioner's finding that remittances were not for the exported goods was unfounded. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting the appellants the restoration of the drawback amount returned by them.

In conclusion, the Tribunal's decision focused on the lack of evidence supporting the Commissioner's doubts regarding the remittances and the timing of resale of goods, ultimately ruling in favor of the appellant due to the satisfactory explanation provided and the bank's confirmation of the remittances' connection to the exported goods.