2010 (12) TMI 375 - HC - Customs

Duty drawback under Rule 7(1) - Brand rate - Condonation of delay - Circular dated 9th December 2003 - The circular had been occasioned in the light of difficulties faced by exporters in obtaining EP copies of shipping bills - Thus, the findings recorded by the Commissioner that the rules do not provide for furnishing EP copies of shipping bills along with the application for fixation of brand rate of drawback does not appear to be correct inasmuch as though the rules may not specifically provide for furnishing copies of EP shipping bills, it appears that under the checklist below circular dated 6th March 2003 referred to hereinabove, copies of EP shipping bills are required to be attached along with application for fixation of brand rate of drawback - The circular would be binding on all the officers of the Government, and therefore, the Commissioner was not justified in brushing aside the same stating that the Ministry has not stated that delay should be condoned in all the cases irrespective of whether the case is covered by the criteria/yardstick given in the relevant legal provisions. Held that thus, the Commissioner was not justified in rejecting the application on the ground that the respondent has failed to prove that they were prevented by sufficient cause from making applications within the time-limit inasmuch as copies of shipping bills were not required to be filed along with the applications - The impugned order of the Tribunal is sustainable.

Summary

Issues:
- Challenge to order under Section 35G of the Central Excise Act, 1944 regarding condonation of delay in filing application for fixation of brand rate of drawback under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995.

Analysis:
1. The appeal under Section 35G of the Central Excise Act, 1944 challenged the order rejecting the application for condonation of delay in filing applications for brand rate of duty drawback. The respondent, engaged in manufacturing and exporting Tubular Towers, filed applications for brand rate fixation, some delayed. The Commissioner rejected the application for condonation of delay due to being beyond the limitation period and lack of sufficient cause.

2. The Tribunal allowed the appeal, setting aside the Commissioner's order, and remanded the matter to consider the application by condoning the delay. The appellant challenged this decision, arguing that the Tribunal unjustifiably directed condonation despite the repeated delayed applications without sufficient cause, potentially altering the time-limit specified in Rule 7 of the Rules.

3. The respondent contended that the delay was due to the belief that EP copies of shipping bills were required, which was not specified in the Rules. Referring to relevant circulars, the respondent argued for a lenient view, citing financial difficulties and export challenges. The Tribunal considered these aspects, emphasizing the need for a liberal approach in condoning the delay beyond the usual 60-day period.

4. The circular dated 9th December 2003 highlighted the Ministry's facilitative approach towards exporters facing delays in obtaining EP copies of shipping bills. The Tribunal's decision to condone the delay was based on these considerations, finding no legal error or arbitrariness. The Tribunal's exercise of discretion was deemed reasonable and not warranting interference.

5. The Commissioner's rejection based on the absence of specific rules mandating EP copies submission was deemed incorrect. The circulars indicated a requirement for a liberal approach in condoning delays due to exporter challenges. The Tribunal's decision aligned with these considerations and was upheld as legally sound, not giving rise to any substantial question of law. Consequently, the appeal was dismissed.