2015 (10) TMI 2618 - CGOVT - Customs

Duty Drawback - Section 74 of the Customs Act, 1962 - While leaving India, the passenger got an endorsement done of the goods imported by him on his ticket signed by an Inspector of Customs as evidence of having exported these goods - whether the impugned goods were same as which were exported? - Held that - the identity of exported goods with regard to imported goods could not be established to the satisfaction of Assistant Commissioner/Deputy Commissioner as required under law. In this case the only document produced by the passenger was the air ticket with an endorsement which is neither a proper document nor does it contain particulars of the goods imported and exported. Further, no declaration under Section 77 was made by the respondent nor any order permitting the clearance of the goods for exportation, by the proper officer was issued. Therefore, it was not feasible to establish the identity of the impugned goods as the same which were imported to entitle them to drawback - Commissioner (Appeals) has erred in allowing drawback of the duty paid by the passenger at the time of importation when there was substantive non-compliance with the mandatory provisions of Section 74 of the Customs Act, 1962 - revision application allowed.

Summary

Issues:
1. Refund claim under Section 74 of the Customs Act, 1962.
2. Compliance with procedural and substantive requirements for claiming drawback.
3. Condonation of delay in filing revision application.

Issue 1: Refund claim under Section 74 of the Customs Act, 1962:
The case involved a passenger who imported goods for exhibition, which were seized as they were of a commercial nature. The passenger filed a refund claim under Section 74 of the Customs Act, 1962, seeking a drawback on re-export of duty-paid goods. However, the refund claim was rejected by the Deputy Commissioner (Refund), IGI Airport, New Delhi, as the passenger failed to fulfill the conditions laid down under Section 74. The Commissioner (Appeals) initially allowed the passenger's appeal, but the Department filed a revision application challenging this decision, citing non-compliance with mandatory provisions of Section 74.

Issue 2: Compliance with procedural and substantive requirements for claiming drawback:
The Department argued that the passenger did not fulfill the conditions under Section 74, as no declaration was made under Section 77, and no order permitting clearance of goods for exportation was issued. The goods exported were not identified to the satisfaction of the Assistant Commissioner/Deputy Commissioner of Customs as the goods imported. The Government noted that these requirements are substantive and essential to prevent misuse of the drawback facility. The judgment highlighted that the failure to comply with these provisions disentitles the passenger to any benefit of drawback.

Issue 3: Condonation of delay in filing revision application:
The Department sought condonation of delay in filing the revision application, attributing the delay to the review process and official exigencies. The Government accepted the explanation provided by the Department, condoning the delay of 5 days in filing the revision application. The judgment emphasized that the revision application was filed within the condonable limit of 90 days, allowing the case to be examined on its merits.

In conclusion, the Government found that the Commissioner (Appeals) erred in allowing the drawback of duty paid by the passenger due to substantive non-compliance with the mandatory provisions of Section 74 of the Customs Act, 1962. As a result, the Government rejected the order of the Commissioner (Appeals) and upheld the Order-in-Original, allowing the revision application filed by the Department.