2013 (8) TMI 354 - HC - Customs

Classification of Goods Held that - Directorate General of Central Excise Intelligence was given order to conclude the investigation on as to whether the goods in question were classified under Tariff Item No.848221 or under Tariff Item No.732616 - In case, after investigation it was found that the goods in question were classifiable under Tariff Item No.848221 - the adjudication by the CC shall be concluded as far as possible within a period of two months thereafter subject to complying with the procedure as required and after giving adequate opportunity to the assesse - If it was found that the assesse was not cooperating after giving reasonable opportunity it will be open for the CC to proceed further with adjudication ex-parte after recording reasons. Duty Drawback Held that - CC shall comply with the order passed by the court by which the Revenue more particularly CC was directed to process the pending drawback claims at the rate of 2% if it found that the petitioner had complied with the requirements under rules and regulations - shall pay drawback to the assesse on appropriate value of the exports SLP disposed of by giving instruction of proper adjudication by the department - Decided in favor of assesse.

Issues:
1. Petition to quash direction of the Director General of Central Excise Intelligence and investigation initiated by the office.
2. Recovery of excess drawback claimed by the petitioner.
3. Compliance with earlier court order directing processing of pending drawback claims.
4. Investigation to ascertain correct classification of goods and entitlement to drawback.
5. Directions for investigation conclusion, adjudication, and payment of drawback.
6. Adjustment of recovered amount and refund if petitioner's classification is upheld.

Analysis:

1. The petitioner sought relief through a writ petition to quash the direction of the Director General of Central Excise Intelligence and the investigation initiated by the office. The petitioner claimed that they were entitled to drawback at a certain rate but the respondents attempted to recover excess drawback without proper adjudication.

2. The petitioner contended that they correctly classified the goods under a specific tariff item and claimed the drawback accordingly. The respondents, however, argued that an investigation was ongoing to determine the correct classification and entitlement to drawback. An amount of Rs. 40 Lacs was already recovered from the petitioner without a final decision on the classification of goods.

3. The court noted that a previous order directing the processing of pending drawback claims at a certain rate had not been fully complied with. The respondents were directed to process the pending claims and pay the appropriate drawback within a specified time frame, failing which contempt proceedings were threatened.

4. The respondents informed the court that an investigation was in progress to ascertain whether the goods were correctly classified under a specific tariff item for drawback purposes. The investigation was to be concluded by a certain date, and if a different classification was found, adjudication by the Commissioner of Customs would follow.

5. The court issued detailed directions for the conclusion of the investigation, adjudication process, and payment of drawback based on the investigation's outcome. Timelines were set for each step, emphasizing cooperation from the petitioner and compliance with rules and regulations.

6. The court ordered the adjustment of the recovered amount from the petitioner, subject to the final outcome of the investigation and adjudication process. If the petitioner's classification was upheld, the recovered amount was to be returned promptly with statutory interest. The court clarified that the order did not express any opinion on the merits and allowed both parties to pursue further legal action if necessary.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the court's directions and decisions regarding the petition and related matters.

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