2015 (9) TMI 1525 - CGOVT - Customs

Duty drawback - brand rate - subsequent exported goods had been notified under list of All Industry Rate - filing of supplementary claim - Whether the supplementary drawback claim filed u/r 15 of the Drawback Rules, 1995 by M/s. Cummins India Ltd. is hit by limitation or not? - Held that - the relevant date for the purpose of limitation under Rule 15 ibid is the date of settlement and payment of original drawback claims by the proper officer and not the date of Order-in-Original No. 31/2010-11, dated 21-3-2011 as passed by the Commissioner for recovery of excess drawback paid. As the claims were not filed within three months from the respective date of settlement of the original claims, the supplementary claims have rightly been held as time-barred by the original authority in the impugned Orders-in-Original dated 1-6-2011. Whether limitation period for filing supplementary drawback claim under Rule 15 ibid can be relaxed by exercise of authority under Rule 17 ibid? - Held that - Government holds that the powers given u/r 17 ibid are beyond the scope of powers to be exercised under Section 129DD of the Act. As such mention of Central Government in Rule 17 ibid does not refer to Joint Secretary, Revision Application or empower him on behalf of Central Government for the purpose of Rule 17 ibid. Government observes that the Commissioner (Appeals) exercises quasi-judicial authority u/s 128A of the Customs Act, 1962 being the first level of appeal against orders passed by officers lower in rank than a Commissioner of Customs. It would thus be beyond the scope of the powers conferred by the said Section for the Commissioner (Appeals) to exercise authority under a Section or a Rule for which he is not empowered. Hence, Government holds that in allowing relaxation u/r 17 ibid, the Commissioner (Appeals) has exceeded his statutory jurisdiction. The supplementary drawback claim was clearly time-barred in terms of Rule 15 ibid; and Commissioner (Appeals) s order is not just and proper in holding that the claim cannot be treated as time-barred in reference to Rule 17 and has erred in directing the lower authority to admit the claim and process it as per law. Revision allowed.

Summary

Issues Involved:
1. Limitation period for filing supplementary drawback claims under Rule 15 of the Drawback Rules, 1995.
2. Applicability and exercise of authority under Rule 17 of the Drawback Rules, 1995 for relaxing the limitation period.

Detailed Analysis:

Issue 1: Limitation Period for Filing Supplementary Drawback Claims under Rule 15
The case revolves around the supplementary drawback claims filed by the respondent, M/s. Cummins India Ltd., for the period from May 2005 to February 2010. The respondent initially claimed drawback under Rule 6 of the Drawback Rules, 1995, which was later found to be erroneous as the goods were already covered under the All Industry Rate (AIR) for Drawback under Rule 3. The Department issued show cause notices for recovery of excess drawback sanctioned. The respondent filed supplementary drawback claims on 22-3-2011, which were rejected by the Assistant Commissioner of Customs as time-barred.

The Commissioner (Appeals) allowed the appeal, holding that the claims were not time-barred under Rule 17. However, the Revisionary Authority set aside this order, and the High Court remanded the matter to the Revisionary Authority to decide afresh.

According to Rule 15, a supplementary claim must be filed within three months from the date of payment or settlement of the original drawback claim by the proper officer. This period can be extended by the Assistant Commissioner/Deputy Commissioner of Customs for a further nine months if sufficient cause is shown. In this case, the original drawback claims were settled between 2006 and 2010, and the supplementary claims were filed only on 22-3-2011, well beyond the permissible period. No request for condonation of delay was made by the respondent at the time of filing the supplementary claims, making them clearly time-barred.

Issue 2: Applicability and Exercise of Authority under Rule 17 for Relaxing the Limitation Period
Rule 17 of the Drawback Rules, 1995, provides the Central Government the power to relax any provision of the rules if the exporter has failed to comply for reasons beyond their control. The Revisionary Authority under Section 129DD of the Customs Act, 1962, does not have the power to exercise this relaxation. The authority to relax under Rule 17 is vested with the Central Government, specifically through the Joint Secretary, Drawback.

The Commissioner (Appeals) exceeded his jurisdiction by invoking Rule 17 to condone the delay in filing the supplementary claims. The Revisionary Authority, as per the statutory provisions, cannot exercise the powers under Rule 17. The respondent did not seek condonation of delay at the time of filing the supplementary claims nor did they approach the competent authority under Rule 17 before filing the claims. Hence, the claims were rightly held as time-barred by the original authority.

Conclusion:
The supplementary drawback claims filed by M/s. Cummins India Ltd. were time-barred as per Rule 15 of the Drawback Rules, 1995. The Commissioner (Appeals) erred in invoking Rule 17 to condone the delay, which was beyond his statutory jurisdiction. The Revisionary Authority, under Section 129DD, does not have the power to relax the provisions under Rule 17. Consequently, the impugned Order-in-Appeal was set aside, and the Order-in-Original was restored. The revision application succeeded, and the supplementary claims remained rejected as time-barred.