2010 (12) TMI 730 - HC - Customs

Duty drawback - Notification No. 27/2002-Cus., dated 1st March, 2002 - On a plain reading of sub-rule (1) of Rule 5 of the Rules, it is apparent that what is required under the said rule is that a claim for drawback under the Rules should be filed in the form at Annexure II within three months from the date on which an order permitting clearance and loading of goods for exportation under Section 51 is made by proper officer of customs where the exporter challenges the order made by the proper officer, he would not be in a position to file a claim within the period prescribed under sub-rule (1) of Rule 5 of the Rules in which case, if he ultimately succeeds in appeal, his claim would become timebarred. - the present case is a case where a claim for drawback had been filed pursuant to an order made by the proper officer as contemplated under sub-rule (1) of Rule 5 and not pursuant to an order made by an appellate authority as contemplated under sub-rule (5) of Rule 5 of the Rules - in the absence of any stay order having been obtained, it is not permissible for the respondent No. 5 to withhold the drawback claim of the petitioner on the ground that a revision application has been filed against the order of Commissioner (Appeals) - Petition is allowed

Summary

Issues Involved:
1. Compliance with Order-in-Appeal for drawback claim.
2. Requirement to file a fresh application under Rule 5 of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995.
3. Entitlement to interest under Section 75A of the Customs Act, 1962.
4. Judicial discipline and compliance with appellate authority orders.

Detailed Analysis:

1. Compliance with Order-in-Appeal for Drawback Claim:
The petitioner sought a direction for the respondents to comply with the Order-in-Appeal No. 11/Commr (A)/JMN/2010 dated 21-1-2010, which granted the petitioner a drawback of Rs. 1,47,59,740/- plus interest. The petitioner had initially filed a claim for drawback under Section 74 of the Customs Act, 1962 after re-exporting a duty-paid barge. The Assistant Commissioner of Customs rejected this claim, but the Commissioner (Appeals) allowed it on appeal. Despite this, the respondents did not implement the order, leading to the present petition.

2. Requirement to File a Fresh Application under Rule 5:
The respondents argued that under sub-rule (5) of Rule 5 of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, the petitioner was required to file a fresh claim application after the appellate order. The petitioner contended that this was unnecessary and motivated by a mala fide intention to deprive them of interest due under Section 75A of the Act. The court examined Rule 5 and found that it envisages filing a claim either pursuant to an order made by the proper officer or an appellate authority. Since the original claim was filed under sub-rule (1) of Rule 5 and allowed by the Commissioner (Appeals), there was no need for a fresh application under sub-rule (5).

3. Entitlement to Interest under Section 75A:
Section 75A of the Customs Act provides for interest on drawback if not paid within one month from the date of filing the claim. The court noted that if the petitioner were required to file a fresh application, it would deprive them of interest from the date of the original claim. The court held that the stand of the respondent No. 5 was contrary to the statutory scheme and could not be accepted.

4. Judicial Discipline and Compliance with Appellate Authority Orders:
The court emphasized the principle of judicial discipline, stating that an order of a higher authority must be followed unreservedly by a subordinate authority unless stayed by a competent higher forum. The respondents had not obtained any stay against the order of the Commissioner (Appeals), and therefore, were duty-bound to comply with it. The court cited the case of Sterlite Industries (India) Ltd. v. Union of India, reinforcing that compliance with appellate orders is mandatory unless stayed.

Conclusion:
The court allowed the petition, directing respondent No. 5 to implement and comply with the Order-in-Appeal dated 21-1-2010 and sanction the petitioner's claim for drawback of Rs. 1,47,59,740/- along with interest in accordance with law. The court found the respondents' insistence on a fresh application to be unjustified and motivated by an intention to deny the petitioner interest due under Section 75A of the Customs Act. The court reiterated the importance of judicial discipline and compliance with appellate orders in the absence of a stay.