2014 (9) TMI 378 - HC - Customs

Condonation of delay in filing writ petition - Rejection of refund of duty or drawback - fixation of brand rate - period of limitation - Sections 74 or 75 of the Customs Act, 1962 - export of 40 units of ultrasound scanners - Senior Analyst (DBK) referring to the letter of the petitioner dated 20-11-1992 informed the petitioner that its case had been reconsidered and found that the petitioner had not filed any application in the prescribed proforma enclosing the DBK statements and the export documents for fixation of brand rate within the time period prescribed under Rule 6(1) of Drawback Rules, 1971. Accordingly the petitioner was informed that the case had been once again rejected as time-barred. Held that - In the present case there is no explanation forthcoming from the petitioner for the inordinate delay of about five years in approaching this Court. The only explanation is that the petitioners had been writing letters/representations. - The petitioner as far back as on 15-9-1991 was informed about the rejection of the claim of the petitioner which was then reiterated vide letters dated 4-6-1992 and 24-3-1993. Despite the rejection of the case of the petitioner, then chose to sit over the matter and let considerable time run by. The explanation that the petitioner was making representation is not an explanation which can be considered as a sufficient explanation for this inordinate delay of about five years in approaching this Court. In the normal course of things limitation to file a suit for recovery or to agitate a claim against the Government for refund of any amount wrongfully claimed or paid would be three years. - writ petition dismissed - Decided against the assessee.

Summary

Issues Involved:
1. Entitlement to duty drawback.
2. Rejection of drawback claim.
3. Delay and laches in filing the writ petition.
4. Exhaustion of alternative remedies.

Issue-wise Detailed Analysis:

1. Entitlement to Duty Drawback:
The petitioner claimed entitlement to a duty drawback of Rs. 7,77,033/- on account of exporting ultrasound scanners on 24-10-1990. The petitioner had paid customs duty under protest and filed a claim for refund/drawback on 27-2-1991. The claim was based on the fulfillment of export obligations and the utilization of imported components in manufacturing the exported ultrasound scanners.

2. Rejection of Drawback Claim:
The Assistant Collector of Customs (Drawback) rejected the petitioner's claim on 15-9-1991, stating it was not covered under Sections 74 or 75 of the Customs Act, 1962. The petitioner was informed that the claim could not be considered for payment and was being filed. Subsequent representations to higher authorities, including the Collector of Customs and the Senior Analyst (Drawback), were also rejected on similar grounds, citing non-compliance with the prescribed application format and time limits under the Drawback Rules, 1971.

3. Delay and Laches in Filing the Writ Petition:
The court emphasized the principle that a party seeking discretionary relief under Article 226 of the Constitution should not sleep over the matter and must approach the court promptly. The petitioner filed the writ petition on 18-1-1996, nearly five years after the initial rejection of the claim on 15-9-1991. The court noted that mere filing of representations does not justify the inordinate delay. Citing Supreme Court precedents, the court reiterated that unexplained delay and laches are adequate grounds for refusing relief.

4. Exhaustion of Alternative Remedies:
The respondents contended that the petitioner had not exhausted the alternative remedy of filing an appeal with the CEGAT. They argued that the petitioner had not applied for the claim in the proper format and within the prescribed time despite being informed. The court agreed with the respondents, noting that the petitioner had not availed the appropriate remedies available under the law and had instead chosen to write letters and representations.

Conclusion:
The court concluded that the petitioner had forfeited the right to discretionary relief due to gross delay and laches. The writ petition was dismissed, with the court refusing to exercise its discretion under Article 226 of the Constitution in favor of the petitioner, who had allowed over five years to lapse before approaching the court. The court emphasized that judicial discipline demands prompt action and that mere representations are not sufficient to explain the delay. The parties were left to bear their own costs.