2018 (1) TMI 1450 - CGOVT - Customs

Recovery of Duty Drawback - all Industry rates - export of Cotton Made ups ITEM - Rule 16/16A of the Drawback Rules - Held that - On examination of Rule 16/16A of the Drawback Rules, the Government finds that drawback amount is recoverable only if the foreign proceeds for export of the goods has not been realised within six months from the export of the goods. But in this case it is noticed that the applicant has received the sale proceeds in time and the mistake on the part of the applicant is only that they did not submit C.A. certificate in time on six monthly basis as per C.B.E. & C. Circular No. 5/2009-Cus., dated 2-2-2009. The applicant has realised the sale proceeds well in time and as a result the applicant s case is not covered under Rule 16/16A of Drawback Rules, 1995. While non-submission of CA certificate on six monthly basis as per C.B.E. & C. circular is certainly a lapse, it cannot be termed as violation of above Drawback Rules. For non-realisation of ₹ 2142.13 against shipping bill No. 546, the applicant has already deposited the drawback amount of ₹ 152/- along with interest of ₹ 80/- and its correctness has not been disputed by the Commissioner (Appeals) or even by the lower authority. The Government is of the clear view that drawback of duty has been correctly availed by the applicant in respect of above referred six shipping bills and its recovery is not warranted in this case as the applicant has realised sale proceeds within stipulated period of six months - revision application allowed.

Summary

Issues involved:
Recovery of duty drawback, submission of CA certificate, realization of sale proceeds within stipulated period.

Analysis:
The case involves a Revision Application filed against the rejection of an appeal by the Commissioner (Appeals) regarding the recovery of duty drawback and imposition of penalty on the applicant for not realizing export proceeds within the stipulated period. The applicant had exported "Cotton Made ups ITEM" claiming drawback at all Industry rates but failed to produce BRCs for certain exports. The Deputy Commissioner initiated recovery proceedings amounting to ?49,818/- along with interest and imposed a penalty of ?12,000/-. The applicant contended that they had realized the sale proceeds for most exports and had deposited the amount for the remaining uncollected proceeds. The Commissioner (Appeals) upheld the Deputy Commissioner's order due to the non-submission of CA certificate on a six-monthly basis as required. However, it was noted that the applicant had received the sale proceeds in time, and the non-submission of the certificate was the only lapse.

The Government examined Rule 16/16A of the Drawback Rules and found that recovery of drawback amount is warranted only if foreign proceeds are not realized within six months of export. Despite the lapse in submitting the CA certificate on time, it was evident that the sale proceeds were received within the stipulated period. The Commissioner (Appeals) acknowledged that the sale proceeds were realized on time but still upheld the order due to the procedural lapse. The Government concluded that the applicant had correctly availed the duty drawback for the exports in question and that recovery was not justified as the sale proceeds were received within the required timeframe.

Therefore, the Government set aside the Commissioner (Appeals)'s order and allowed the Revision Application, ruling in favor of the applicant. The decision was based on the fact that the applicant had complied with the requirement of realizing sale proceeds within six months, even though there was a procedural lapse in submitting the CA certificate on time.