2018 (1) TMI 1457 - CGOVT - Customs

Duty Drawback - re-export of aircraft under Section 74 of Customs Act, 1962 - rejection of drawback on the ground that duty is not finally assessed and the matter is sub-judice - Held that - The Dy. Commissioner has denied duty drawback to the applicant by citing a reason that duty has been paid in this case on provisional basis and Commissioner (Appeals) has given an additional reason that importability of the aircraft is yet to be settled. Both these reasons are manifestly unfounded and misplaced as the issue regarding levy of duty has already been finalized by the Commissioner of Customs, Kolkata, and the applicant has not contested his order to the extent of recovery of Customs duty. Duty demanded from the applicant has already been paid. Further even if it is accepted that duty has been paid on provisional basis, it cannot be ignored that applicant has also requested for drawback of duty in reference to actual Customs duty paid by them whether it is final or provisional. The appeal filed by the applicant before CESTAT against Commissioner s order before CESTAT also does not have any nexus with the applicant s claim for duty drawback and if there is any recovery of dues thereafter it can be settled even subsequently - But merely because of their pending appeal, the drawback of duty cannot be refused when they have already paid customs duty much before and the disposal of the appeal can take its own time. Government is fully convinced that duty drawback is admissible in this case in accordance with Section 74 of the Customs Act, 1962 and it should be paid immediately to the applicant - revision application allowed.

Summary

Issues:
- Duty drawback claim rejection by Dy. Commissioner, ICD, Tughlaqabad, New Delhi
- Rejection of appeal by Commissioner (Appeals) regarding importability of aircraft under Section 74 of the Customs Act, 1962

Analysis:
1. Duty Drawback Claim Rejection:
The case involves the applicant's duty drawback claim rejection by the Dy. Commissioner, ICD, Tughlaqabad, New Delhi. The applicant imported an aircraft on a temporary basis, which was later re-exported. The Dy. Commissioner rejected the drawback claim, stating that duty was not finally assessed and the matter was sub-judice. However, the Government observed that the duty had been paid, either provisionally or finally, and the applicant had fulfilled the criteria for re-export under Section 74 of the Customs Act, 1962. The Government found the reasons for rejection unfounded and misplaced. It was noted that the issue of duty payment had been settled by the Commissioner of Customs, Kolkata, and the duty demanded had been paid by the applicant. The pending appeal before CESTAT did not have a direct impact on the duty drawback claim. Therefore, the Government concluded that duty drawback was admissible, and the claim should be paid to the applicant without delay.

2. Rejection of Appeal on Importability Issue:
The second issue pertains to the rejection of the applicant's appeal by the Commissioner (Appeals) concerning the importability of the aircraft under Section 74 of the Customs Act, 1962. The Commissioner (Appeals) had rejected the appeal, stating that the importability of the aircraft was yet to be decided. However, the Government found no basis for this observation, as it was established that the aircraft had been imported into India, and customs duty had been demanded and paid by the applicant. The Government emphasized that the importability of the aircraft was already settled, and there was no justification for denying duty drawback based on this ground. Consequently, the Government set aside the Commissioner (Appeals) order and allowed the revision application filed by the applicant, directing the immediate payment of duty drawback in accordance with Section 74 of the Customs Act, 1962.

In conclusion, the judgment addressed the issues of duty drawback claim rejection and the rejection of the appeal based on the importability of the aircraft. It clarified that the duty had been paid, and the criteria for re-export had been met, making the duty drawback claim admissible. Additionally, it emphasized that the importability of the aircraft was not a valid reason to deny the duty drawback. The Government's decision to set aside the Commissioner (Appeals) order and allow the revision application aimed to ensure the applicant received the rightful duty drawback without further delay.