2015 (8) TMI 581 - HC - Customs

Drawback allowable on re-export of duty-paid goods Barred by Time Petitioner presented duty drawback claim application before fifth respondent belatedly which was not accepted by fifth respondent on ground that claims were time barred Held that - Rule 5 of Rules, 1995 mandates that exporter would be entitled to file claim for duty draw back within outer limit of six months by explaining delay Reasons for delay was petitioners inability to collect documents at time and file same before authorities Genuineness of claim made by petitioner was not doubted by authorities Third respondent intimated fourth respondent that such refusal would be irregular and even if time barred applications were to be received they came to be dealt with in accordance with extant rules In view of fact that first respondent amended Rule 5 of Rules, 1995 and extended period from 6 months to 9 months therefore was empowered to condone delay It was held in COMMISSIONER OF CUSTOMS, MUMBAI vs. TERAI OVERSEAS LTD 2002 (10) TMI 109 - HIGH COURT AT CALCUTTA that while considering application for drawback, documents filed in support of claim should be considered liberally and drawback cannot be denied on mere technicalities or by adopting narrow and pedantic approach, since duty drawback is incentive scheme In view of said observation impugned order set aside Matter remitted to first respondent to consider applications of petitioner Decided in favour of Appellant.

Summary

Issues Involved:
1. Quashing of the order dated 13.05.2014 rejecting the condonation of delay in filing the duty drawback application.
2. Direction to allow duty drawback claimed by the petitioner.
3. Alternate prayer for remanding the matter for fresh adjudication.

Detailed Analysis:

1. Quashing of the Order Rejecting Condonation of Delay:
The petitioner sought to quash the order dated 13.05.2014, which rejected their applications for condoning the delay in filing for duty drawback under Section 74 of the Customs Act, 1962. The delay ranged from 6 to 13 months, exceeding the prescribed period under the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995. The petitioner attributed the delay to the difficulty in collecting original documents from various locations. Despite the petitioner's representations dated 04.01.2008 and 04.10.2008, the first respondent rejected the delay condonation, citing inconsistency in the petitioner's and their Custom House Agent's statements.

2. Direction to Allow Duty Drawback:
The petitioner argued that the authorities confirmed the exportation of goods and thus, the delay should have been condoned pragmatically rather than pedantically. The petitioner emphasized that the Rules had been amended to extend the period for filing duty drawback claims from three to nine months. The petitioner contended that the genuine nature of their claim, supported by the jurisdictional Commissioner's confirmation of exportation, warranted a liberal approach in condoning the delay.

3. Alternate Prayer for Remanding the Matter:
The petitioner alternatively prayed for remanding the matter to the first respondent for fresh adjudication. The court noted that the genuineness of the petitioner's claim was not in doubt, and the delay was due to reasons beyond their control. The court highlighted that under Rule 7A of the Rules, 1995, the Central Government has the power to relax the prescribed period if satisfied with the reasons for the delay.

Judgment:
The court observed that the petitioner's exports were confirmed by the jurisdictional Commissioner, and the delay was due to the logistical challenge of collecting documents from different locations. The court referred to precedents, including the Division Bench of the Karnataka High Court in UNION OF INDIA vs WIPRO LIMITED and the Kolkata High Court in COMMISSIONER OF CUSTOMS, MUMBAI vs. TERAI OVERSEAS LTD, which emphasized a liberal approach in condoning delays for genuine claims.

The court set aside the impugned order and remitted the matter to the first respondent for reconsideration. The first respondent was directed to evaluate the applications dated 04.01.2008 and 04.10.2008, keeping in mind the observations regarding Rule 7A and the amendment to Rule 5 of the Rules, 1995. The first respondent was instructed to complete the exercise within three months from the receipt of the court's order.

Conclusion:
The court quashed the order rejecting the condonation of delay and remanded the matter for fresh adjudication, emphasizing a pragmatic and liberal approach in considering genuine claims for duty drawback.