2016 (8) TMI 713 - HC - Customs

Withholding of duty drawback - only those drawbacks are not sanctioned where shipping bills are under investigation - Held that - The claimants ought to know as to, when the State facilitates export and when valuable foreign exchange has been brought in the country, why his rebate or drawback claims have not been processed, why they are held back and if there are certain investigations initiated, when would they be completed and any information is required about such export. There should be complete transparency and openness in this regard. We do not approve of the tendency of the authorities in not conducting the investigation expeditiously although they have noticed that false and bogus claims are being raised by certain exporters. There is no need to treat all exporters alike if it is only some exporters who are indulging in a wrongful act. Until such investigations against some entities are in progress, there is no need to hold back all drawbacks and by a wholesale direction or some internal communication, the details of which are not available for consumption of exporters. We hope and trust that the pending investigation would be concluded expeditiously by 30.09.2016.

Summary

Issues:
1. Processing of drawback claims
2. Withholding of drawbacks
3. Coordination between Directorate of Revenue Intelligence and Customs Commissionerate
4. Transparency in investigations
5. Conclusion of pending investigations

Processing of Drawback Claims:
The petitioners, represented by Mr. Hidayatollah, raised concerns regarding the processing of drawback claims. Mr. Jetly, representing the respondents, clarified that drawbacks related to fresh exports have been processed, and only claims linked to shipping bills under investigation are withheld. He explained the time-consuming nature of processing drawback claims, stating that it usually takes around 30-60 days from the date of shipment for claims to be sanctioned. The court emphasized the need for timely processing of claims and directed that all claims not under investigation should be processed within the specified time frame.

Withholding of Drawbacks:
Mr. Hidayatollah highlighted that despite partial compliance with earlier orders, the drawbacks for certain entities were still being withheld. He referred to an additional affidavit stating that the Deputy Commissioner of Customs at Nhava Sheva cited an internal letter from the Directorate of Revenue Intelligence as the reason for not processing the claims. However, the Directorate denied issuing any such alert, leading to a demand for specific directions to resolve the issue. Mr. Jetly countered this claim, stating that there was no internal communication as alleged, and any delay in processing claims was due to ongoing investigations related to specific shipping bills.

Coordination between Directorate of Revenue Intelligence and Customs Commissionerate:
The court stressed the importance of coordination between the Directorate of Revenue Intelligence and the Customs Commissionerate at the Port to ensure the timely processing of drawback claims. Despite assurances from the Directorate and Customs House, there were concerns about the lack of adherence to court orders and delays in investigations. The court directed the Directorate to inform the Customs House about the current order and ensure transparency in communication regarding the status of investigations and processing of claims.

Transparency in Investigations:
Emphasizing transparency in the investigative process, the court criticized the authorities for not expediting investigations into false claims by certain exporters. It was noted that all exporters should not be penalized for the actions of a few, and investigations should be conducted promptly to avoid undue delays in processing legitimate claims. The court called for openness and transparency in providing information to claimants regarding the status of investigations and the reasons for withholding claims.

Conclusion of Pending Investigations:
The court set a deadline of 30.09.2016 for the conclusion of pending investigations and directed that no further extensions would be granted. The matter was scheduled for compliance review after the specified date, and the Writ Petition was disposed of without costs. The judgment aimed to ensure the fair and timely processing of drawback claims while maintaining transparency and efficiency in the investigative process.