2016 (9) TMI 617 - HC - Customs

Processing of drawback application - denial of deemed export drawback - All Industry Rate of Duty Drawback - customs duty components paid on inputs/components - Column-B, Sr No.540203 of Schedule of All Industry Duty Drawback Rates 2011-2012 - EOU - DTA - principles of natural justice - information by letters and no personal hearing - whether the decision given by Development Commissioner on supplies made from the domestic tariff unit to the export oriented unit not eligible for refund on All Industry Draw Back Rate without providing any opportunity of being heard to the petitioner is tenable in law? - Held that - it was expected from the Development Commissioner that he would apply his mind to the whole case and after a oral hearing to the Petitioner pass a reasoned order in accordance with law. The Development Commissioner SEEPZ, Special Economic Zone, Mumbai himself will now grant a personal hearing to the Petitioner and on perusal of all the records pass a proper reasoned order on the draw back application within three months from the date of receipt of a copy of this order - petition disposed off - decided in favor of petitioner.

Summary

Issues:
1. Denial of deemed export drawback under All Industry Rate of Duty Drawback on customs duty components paid on inputs/components.
2. Proper opportunity of being heard not provided to the Petitioners during the decision-making process.
3. Application for duty drawback not decided in accordance with law.
4. Compliance with principles of natural justice during the decision-making process.

Analysis:

1. The judgment deals with the denial of deemed export drawback under the All Industry Rate of Duty Drawback on customs duty components paid on inputs/components. The Petitioners sought a declaration of entitlement to the deemed export drawback mentioned in the Schedule of All Industry Duty Drawback Rates 2011-2012. The Respondents contended that the relief could not be granted due to settled issues based on a Division Bench judgment. However, the Court emphasized the importance of a proper decision-making process and compliance with principles of natural justice.

2. The Petitioners raised concerns regarding the lack of a proper opportunity to be heard during the decision-making process. The Court noted that the application seeking relief had not been decided in accordance with the law. The Petitioners were engaged in correspondence by the department but were not given a fair chance to present their case or have their points addressed during oral hearings. This lack of proper consideration led to the Court's intervention to ensure a fair process.

3. The judgment highlighted the importance of complying with the principles of natural justice in administrative decisions. The Court emphasized that the authorities must provide a reasoned order after considering all relevant factors and giving the concerned parties a fair opportunity to present their case. The Court directed the Development Commissioner to grant a personal hearing to the Petitioner, review all records, and pass a reasoned order on the draw back application within a specified timeframe to ensure procedural fairness.

4. The Court's decision focused on ensuring a fair and just process in the decision-making regarding duty drawback applications. By directing the Development Commissioner to conduct a proper review and provide a reasoned order, the Court aimed to uphold the principles of natural justice and procedural fairness. The judgment emphasized the need for administrative decisions to be made in accordance with the law and without being influenced by prior communications that may not have adequately considered the Petitioners' arguments.