2015 (6) TMI 1108 - CGOVT - Customs

Duty drawback - recovery of sanctioned drawback - recovery on the ground that applicant failed to produce the evidence for realization of export proceeds in respect of impugned exported goods for which they were allowed drawback within the period allowed - Held that - it is a statutory requirement under Section 75(1) of Customs Act, 1962 & Rule 16A(1) of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, read with Section 8 of FEMA, 1999 read with Regulations 9 of Foreign Exchange Management (Export of Goods & Services) Regulations, 2000 & Para 2.41 of EXIM policy 2005-2009 that export proceeds need to be realized within the time limit provided thereunder viz six months in this case subject to any extension allowed by RBI - the applicant failed to produce Bank Realization Certificates even after 11 years from the date of exports - the drawback availed by the applicant is liable for recovery - revision rejected - decided against Applicant.

Summary

Issues:
Recovery of drawback amount due to failure to submit Bank Realization Certificate, Legal validity of the impugned Order-in-Original and Order-in-Appeal, Compliance with statutory requirements for realization of export proceeds.

Analysis:
The revision application was filed against the Order-in-Appeal, which upheld the recovery of a drawback amount of Rs. 89,688 granted for exports made in 2002. The applicant failed to produce Bank Realization Certificate (BRC) for realization of export proceeds within the stipulated period, leading to a Show Cause Notice in 2007. The Order-in-Original confirmed the recovery of the drawback amount, interest, and imposed a penalty. The applicant contended that the Show Cause Notice was not served, challenging the legality of the order due to a lack of natural justice principles. Additionally, the applicant argued that export proceeds had been realized, supported by a Chartered Accountant's certificate, which the lower Appellate Authority failed to consider properly. The applicant also criticized the reliance on irrelevant case laws by the lower Appellate Authority.

The Government reviewed the case records and noted the issuance of the Show Cause Notice for non-submission of BRC within the specified period under relevant laws. The Order-in-Original confirmed the recovery of the drawback amount, interest, and imposed a penalty, a decision upheld by the Commissioner (Appeals). The applicant's revision application raised concerns about the non-service of the Show Cause Notice and the realization of export proceeds, supported by a Chartered Accountant's certificate. However, the Government found that the applicant failed to comply with statutory obligations regarding the realization of export proceeds within the specified time limit, as required by Customs Act, 1962, and related rules and regulations. The Government emphasized the importance of submitting BRC as proof of foreign exchange realization, which the applicant failed to provide even after 11 years from the date of exports. Consequently, the Government upheld the Order-in-Original, rejecting the revision application for lack of merit.

In conclusion, the judgment focused on the legal requirements for realizing export proceeds within the specified time limit, emphasizing the significance of submitting Bank Realization Certificates as proof of foreign exchange realization. The Government's decision upheld the recovery of the drawback amount, interest, and penalty due to the applicant's failure to comply with statutory obligations, despite the submission of a Chartered Accountant's certificate. The judgment highlighted the statutory framework governing export proceeds realization and the consequences of non-compliance, leading to the rejection of the revision application.