2015 (6) TMI 1110 - CGOVT - Central Excise

Recovery - duty drawback granted earlier - 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 under Foreign Exchange Management Act, 1999 including any extensions of such period granted by the RBI - Held that - it is a statutory requirement under relevant sections that export proceeds need to be realized within the time-limit provided thereunder viz. 6 months in this case subject to any extension allowed by RBI. As discussed above, the applicant has failed to fulfill their statutory obligations. Therefore, the order for recovery of drawback claim along with interest & penalty cannot be faulted with - revision application rejected - decided against applicant.

Summary

Issues Involved:
1. Recovery of sanctioned drawback due to failure to produce evidence for realization of export proceeds.
2. Alleged violation of principles of natural justice.
3. Compliance with procedural requirements for submission of Bank Realization Certificates (BRCs).
4. Validity of the adjudicating authority's decision without personal hearing.

Issue-wise Detailed Analysis:

1. Recovery of Sanctioned Drawback:
The applicant was initially granted a drawback of Rs. 81,336 for exports made. Subsequently, a show cause notice was issued for recovery of the sanctioned drawback on the grounds that the applicant failed to produce evidence for the realization of export proceeds within the period allowed under the Foreign Exchange Management Act, 1999. The original authority confirmed the demand for recovery along with interest under Rule 16A of the Customs, Central Excise & Service Tax Drawback Rules, 1995, and imposed a penalty under Section 117 of the Customs Act, 1962. The Commissioner (Appeals) upheld this order.

2. Alleged Violation of Principles of Natural Justice:
The applicant contended that the impugned order was passed in gross violation of the principles of natural justice. They argued that the adjudicating authority did not examine the factual position or verify the records available in their own office. The applicant claimed they had submitted the required documents, including the negative certificate from the chartered accountant, which established the realization of sale proceeds within the time-limit. They also argued that the orders were passed without granting a personal hearing, and despite offering enough chances, the applicant never received any intimation for a personal hearing.

3. Compliance with Procedural Requirements for Submission of BRCs:
The applicant argued that they had submitted the Bank Realization Certificates (BRCs) and a negative certificate from the chartered accountant in accordance with C.B.E. & C. Circular No. 5/2009-Cus., dated 2-2-2009. However, the government observed that the applicant failed to comply with the requirements of the said circular. The chartered accountant's certificate did not provide details and dates of receipt of remittances. The applicant submitted a copy of the export collection payment advice instead of the BRC in the prescribed format by the DGFT. The government noted that there is no relaxation from the submission of BRCs in the specified format, and the drawback availed by the applicant was liable for recovery in the absence of proof of foreign exchange realization within the stipulated time-limit.

4. Validity of the Adjudicating Authority's Decision Without Personal Hearing:
The applicant claimed that the adjudicating authority did not offer personal hearings, which is a violation of the principles of natural justice. They argued that the orders were passed nearly one and a half years after the show cause notice without giving them an opportunity to explain their stand or submit documents again if required. The government, however, noted that the applicant failed to produce the necessary evidence within the stipulated time-limit and upheld the original authority's decision.

Conclusion:
The government found no infirmity in the impugned Order-in-Appeal and upheld the same. The revision application was rejected as devoid of merit, affirming the recovery of the sanctioned drawback along with interest and penalty due to the applicant's failure to fulfill their statutory obligations under Section 75(1) of the Customs Act, 1962, Rule 16A(1) of the Customs, Central Excise & Service Tax Drawback Rules, 1995, and other relevant regulations. The decision emphasized the importance of complying with procedural requirements and the statutory obligation to realize export proceeds within the prescribed time-limit.