2021 (6) TMI 1139 - CGOVT - Customs

Duty drawback - demand on the grounds that the Applicant did not receive the export proceed against the 02 Shipping Bills within specified period and in the remaining Shipping Bills the export proceeds were not realized in full - whether the recovery of proportionate drawback amount from the Applicant in respect of the remaining 174 Shipping Bills on account of shortfall in realization of export proceeds is valid? HELD THAT - Application has contended that export proceeds in respect of the remaining 174 Shipping Bills were fully realized however the Bank has deducted some amount on account of Bank charges. Government observes that the issue of Bank charges was also raised by the Applicant before the original authority but the same was not considered. Central Board of Indirect taxes Customs vide Circular No. 33/2019- Customs (issued vide F. No. 609/19/2019-DBK) dated 19.09.2019 has clarified that duty drawback is not recoverable where the export proceeds realized are short on account of bank charges deducted by foreign banks. The said instructions are clarificatory in nature. Thus Government holds that the entire matter pertaining to the deduction of bank chargers and recovery of proportionate drawback amount corresponding thereto needs to be relooked. It would be in the interest of justice that the matter is remanded back to the original authority with the direction to decide the matter afresh on merits as far as it pertains to the deduction of bank charges and recovery of proportionate drawback amount on account thereof keeping in view the instructions contained in Board s Circular dated 19.09.2019 - Revision application disposed off.

Issues:
1. Rejection of appeal against the Order-in-Original by Commissioner of Customs.
2. Failure to submit proof of export proceeds realization.
3. Recovery of availed drawback amount.
4. Appeal rejection by Commissioner (Appeals) as barred by limitation.
5. Grounds for rejection of appeal by Commissioner (Appeals).
6. Recovery of proportionate drawback amount.
7. Deduction of bank charges from export proceeds.
8. Validity of recovery of proportionate drawback amount.
9. Consideration of bank charges issue by lower authorities.
10. Compliance with Circular No. 33/2019-Customs.

Analysis:
The case involves a Revision Application filed against the rejection of an appeal by the Commissioner of Customs regarding the recovery of availed drawback amount. The Applicant had filed drawback claims for 176 Shipping Bills but failed to submit proof of export proceeds realization, leading to a demand for recovery of Rs. 88,16,720/- along with interest. The Commissioner (Appeals) rejected the appeal as barred by limitation, based on the Applicant's failure to prove realization of export proceeds within the stipulated time period.

During the personal hearing, the Applicant admitted the non-realization of export proceeds for 2 Shipping Bills within the specified time period, while arguing that the remaining amount included bank charges deducted by the Bank. The Government observed that the recovery of proportionate drawback amount was valid for the 2 Shipping Bills but required reevaluation for the remaining 174 Shipping Bills due to the deduction of bank charges. The Circular No. 33/2019-Customs clarified that duty drawback is not recoverable if export proceeds are short due to bank charges deducted by foreign banks.

Ultimately, the Government directed a relook into the deduction of bank charges and recovery of proportionate drawback amount, remanding the matter back to the original authority for a fresh decision on merits in line with the Circular dated 19.09.2019. The Revision Application was disposed of with these directions, emphasizing the need for a thorough reconsideration of the issue related to bank charges and recovery of proportionate drawback amount.

← Previous Next →