2014 (1) TMI 1118 - AT - Customs

Jurisdiction of Tribunal - Interest on drawback - Held that - initial order refusing grant of drawback was passed by the jurisdictional Commissioner and the appeal was heard and decided by the Tribunal allowing grant of the drawback. The issue now before the Tribunal is rejection of claim for interest by the appellants for delayed payment of drawback. I find that in a similar case in M/s. Marvel Apparels (2010 (8) TMI 225 - CESTAT, CHENNAI), the Tribunal has distinguished the decision of the Tribunal in the case of Mercury Exports and Manufacturing (2009 (4) TMI 629 - CESTAT, KOLKATA) and has decided that Tribunal would have jurisdiction to decide an appeal relating to interest on drawback where the drawback was allowed by the Tribunal. I see no reason to take a different view in this case. I also notice that the appellants had initially approached the revision authority in the matter but their revision applications have not been considered saying that the said authority has no jurisdiction to deal with the matter - Decided in favour of assessee. The claim if any with regard to drawback arose only as a subsequent event to the export inasmuch as till the issue of the CESTAT s order in favour of the appellants, the Order-in-Original passed by the Commissioner of Customs, Trichy holding that the export itself did not take place holds goods. The CESTAT in its final order gave the benefit of doubt to the appellants by rejecting the port documents and allowed the appeal of the appellants. Therefore, the drawback become payable w.r.t. Section 75(A)1 of Customs Act, 1962 and the appellants become legitimate claimant for the drawback only from the date of the CESTAT s Final Order issued and until then the Order-in-Original was holding good. Further, the appellants have not produced the required documents listed as per the provisions of Rule 13(2) of Drawback Rules for claiming the said drawback. Drawback becomes payable to the appellants only based on the order passed by the Hon ble CESTAT dated 24-6-2008 and the relevant date for claiming interest under Sec. 75A is after expiry of one month from the date of receipt of abovesaid Hon ble CESTAT order and not for the earlier period. Further, the appellants have not produced the required documents as per Rule 13(2) of Drawback Rules. In absence of any such relevant required documents, the appellants are not eligible for interest for the period earlier to Hon ble CESTAT s order - Decided against assessee.

Summary

Issues:
Jurisdiction of the Tribunal to hear appeals related to interest on drawback; Condonation of delay in filing appeals; Eligibility for interest on drawback prior to Tribunal's order.

Analysis:

Jurisdiction of the Tribunal:
The Tribunal addressed the preliminary objection raised by the Departmental Representative (DR) regarding the Tribunal's jurisdiction to hear appeals related to interest on drawback. The DR cited previous cases to support the objection. However, the counsel for the appellants relied on a different Tribunal decision to argue in favor of the Tribunal's jurisdiction. The Tribunal noted that the appellants initially approached the revision authority, which did not have jurisdiction over the matter. Considering the circumstances and the precedent set by a previous case, the Tribunal overruled the preliminary objection and decided to hear and dispose of both appeals.

Condonation of Delay:
The appellants explained the delay in filing the appeals by stating that they initially approached the revisionary authority under a mistaken belief regarding jurisdiction. Upon rejection of their applications, they approached the Tribunal, leading to delays. The Tribunal, satisfied with the reasons for the delay, condoned the delay in filing both appeals and allowed the miscellaneous applications for condonation of delay.

Eligibility for Interest on Drawback:
The lower appellate authority held that the appellants could not claim interest for delayed sanction of drawback prior to the Tribunal's order. The authority emphasized that the appellants became eligible for drawback only after the Tribunal's order. Additionally, the authority noted that the appellants did not produce required documents as per Rule 13(2) of the Drawback Rules, further justifying the denial of interest for the earlier period. The authority's decision was based on the timing of events related to the export and the lack of necessary documentation. The Tribunal agreed with the lower authority's reasoning and dismissed both appeals, stating that there was no interference required in rejecting the claim for interest for the period before the Tribunal's order.

In conclusion, the Tribunal upheld its jurisdiction to hear the appeals, condoned the delay in filing, and affirmed the lower authority's decision to deny interest on drawback prior to the Tribunal's order. Both appeals were dismissed accordingly.