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2021 (5) TMI 1063 - CGOVT - CustomsRecovery of duty drawback - rejection of appeal of the Applicant on the ground that the Applicant had not realized the export proceeds in the stipulated time period or such extended period - Rule 16A of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - HELD THAT - Government observes that, in terms of Rule 16A(1) ibid, the drawback is recoverable if the export proceeds are not realized within the period allowed under the Foreign Exchange Management Act, 1999, including any extension of such period. Admittedly, in the instant case, the export proceeds have not been realized within the period allowed nor has the extension been granted by the competent authority under FEMA. Further, the provisions of rule 16A(1) enabling recovery of drawback if the export proceeds are not realized within the period allowed under FEMA, including any extension of such period, is not merely a procedural requirement. It is to be observed that drawback is paid before realization of export proceeds and recovery thereof is initiated if such proceeds are not realized within the period prescribed, including any extension of such period. If the requirement of realization within prescribed period is not treated as a mandatory condition, the process of recovery shall remain an unending exercise and thereby render the provisions of Rule 16A(1) otiose. As such, the contentions of the applicant, on this count, are not acceptable. Government do not find any infirmity in the impugned Order-in-Appeal, in so far as it relates to the Applicant herein - revision application is rejected.
Issues:
1. Rejection of drawback claim due to failure to realize export proceeds within stipulated time. 2. Applicant's claim of realizing export proceeds with a delay and onus for extension on Reserve Bank of India. 3. Examination of the case by the Government regarding the realization of export proceeds and denial of statutory benefits for procedural infractions. Analysis: 1. The case involves the rejection of a drawback claim by the Commissioner (Appeals) on the grounds that the Applicant failed to realize the export proceeds within the stipulated time period or any extended period allowed by the Reserve Bank of India. The claim was related to Shipping Bill No. 9305118 dated 08.06.2012, amounting to Rs. 2,80,749, which was sanctioned but later questioned due to the lack of proof of realization of export proceeds as per Rule 16A of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. A show cause notice was issued for recovery, and the Deputy Commissioner confirmed the demand, leading to the appeal by the Applicant. 2. The revision application was filed, arguing that the export proceeds were realized albeit with a delay of 6 months, and the responsibility for any extension lay with the Reserve Bank of India. However, during the virtual personal hearings, neither the Applicant nor the Respondent appeared, leading to the case being decided based on the available facts. The Government noted the Applicant's admission of delayed payment and the absence of proof of any extension granted by the Reserve Bank of India. As per Rule 16A(1), the realization of export proceeds within the period allowed under FEMA, with or without an extension, is crucial. Since the export proceeds were not realized within the prescribed period, and no extension was granted, the denial of the drawback claim was upheld. 3. The Government's examination emphasized that the realization of export proceeds within the specified timeframe is not merely a procedural requirement but a mandatory condition for claiming drawback. Without adhering to this condition, the recovery of drawback becomes necessary. Treating the realization period as non-mandatory would render the recovery process ineffective. Therefore, the contentions of the Applicant regarding the delay in realizing export proceeds were deemed unacceptable, and no infirmity was found in the Order-in-Appeal concerning the Applicant. Consequently, the revision application was rejected, affirming the decision to deny the drawback claim based on the failure to meet the mandatory condition of realizing export proceeds within the specified period.
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