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2021 (8) TMI 1320 - AT - CustomsRecovery of drawback amount under Rule 16 of the Customs Central Excise Duties and Service Tax Drawback Rules 1995 - shipping bills were not challenged by the Department - levy of penalty on the Company as well as the Director under Section 114(iii) of the said Act - period April 2008 and May 2008 - whether the Department could dispute the grant of DEPB and Drawback benefit in the facts of the present case? - HELD THAT - Reliance placed in the case of M/S JAIRATH INTERNATIONAL AND ANR. AND RAJESH DHANDA VERSUS UNION OF INDIA AND ORS. 2019 (10) TMI 642 - PUNJAB AND HARYANA HIGH COURT . In the above mentioned case the DRI issued Show Cause Notices on the basis of investigation initiated by it to allege that the assessee exporter had fraudulently obtained drawback amount. The DRI conducted search at the various premises of the exporters on the basis of which the DRI alleged that the drawback amount was fraudulently obtained on the basis of willful wrong declaration with ulterior motive to defraud the Revenue. Demand proposed in the Show Cause Notice was confirmed against which the assessee approached the High Court. The High Court while relying on the judgements of the Hon ble Supreme Court held that the Department has no power to reassess a shipping bill which was duly assessed by proper officer at the time of export of goods to dispute the export benefit already allowed to the assessee without challenging the shipping bills. In the case of CENTURY KNITTERS (INDIA) LTD. AND ORS. VERSUS UNION OF INDIA AND ORS 2019 (10) TMI 804 - PUNJAB AND HARYANA HIGH COURT the High Court took the same view as held in the case of Jairath International where it was held that inspite of availability of alternative remedy available under 1962 Act writ petition is maintainable in view of involvement of pure questions of law as well jurisdiction and law enunciated by Hon ble Supreme Court and followed by this court time and again. Since the legal position stands already decided by the Hon ble High Court as well as earlier decisions of this Tribunal the impugned adjudication orders cannot be legally sustained and hence the same are set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Recovery of drawback amount under Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. 2. Imposition of penalty under Section 114(iii) of the Customs Act, 1962. 3. Recovery of DEPB amount under Section 124 and Section 28 of the Customs Act, 1962. 4. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue notices. 5. Contesting the demand on grounds of limitation. Issue-wise Detailed Analysis: 1. Recovery of Drawback Amount: The appeals filed by M/s. Premium Ferromet Pvt. Ltd. and its Director contested the recovery of the drawback amount on the grounds that the exported goods were of Indian origin. The appellant argued that the adjudicating authority could not dismiss the defense submitted in response to the show cause notice without proper examination, and the notices were issued based on statements without allowing cross-examination. The appellant relied on the Punjab & Haryana High Court's decision in Jairath International vs. UOI, which held that the adjudicating authority does not have the power to reassess shipping bills already assessed by the Proper Officer under Section 51 of the Customs Act, 1962. The Tribunal agreed with the appellant's reliance on the legal precedent that the Department could not reassess the shipping bills and order recovery of the drawback already granted. 2. Imposition of Penalty: Penalties were imposed on the company and its director under Section 114(iii) of the Customs Act, 1962. The appellant argued that the imposition of penalties was unjustified as the shipping bills were not challenged by the Department. The Tribunal, aligning with the appellant's argument, found that penalties could not be imposed without proper reassessment of the shipping bills. 3. Recovery of DEPB Amount: The appeals filed by M/s. Mortex (India) and its partners challenged the recovery of the DEPB amount for the period 2008-09 to 2012-13. The appellant argued that the recovery was invalid as the shipping bills were not challenged by the Department. The Tribunal referred to the same legal principles applied in the case of drawback recovery and found that the Department could not reassess the shipping bills to recover the DEPB amount. 4. Jurisdiction of DRI to Issue Notices: The appellant contested the jurisdiction of the DRI to issue notices. The Tribunal did not specifically address this issue in detail but implicitly upheld the appellant's argument by setting aside the adjudication orders based on the lack of power to reassess shipping bills. 5. Contesting the Demand on Grounds of Limitation: The appellant also contested the demand on the grounds of limitation. The Tribunal, relying on the principles established in previous judgments, found that the demands were not sustainable due to the lack of reassessment of the shipping bills. Conclusion: The Tribunal, after careful consideration of the legal precedents and arguments presented, concluded that the Department did not have the power to reassess the shipping bills and recover the drawback and DEPB amounts already granted. Consequently, the impugned adjudication orders were set aside, and all five appeals were allowed in full with consequential benefits as per law. The Tribunal's decision was pronounced in the open court on 25 August 2021.
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