2018 (1) TMI 67 - AT - Customs

Duty drawback u/s 74 of CA - denial on the ground of time limitation - whether in the facts and circumstances of the case, the drawback claim filed by the appellant under Section 74 of the Act can be held as time barred or not? - Held that - the appellant initially filed claim for duty paid on the goods re-exported under Section 26A of the Act and during the course of pending of said proceedings, on realising that although the claim under Section 26A is not maintainable, they filed refund claim under Section 74 of the Act - filing the refund claim under wrong provisions does not disentitle the legitimate claim of the appellant. Substantive right of the appellant to file their claim under the correct provisions of the Act cannot be denied, therefore, the benefit of Section 14 of the Limitation Act, 1963 is available to the appellant. The authorities below are directed to entertain the claim of drawback filed by the appellant on merits in the interest of justice - appeal allowed by way of remand.

Summary

Issues:
Claim of drawback under Section 74 of the Customs Act, 1962 denied as barred by limitation.

Analysis:
The appellant imported 20 types of Dietary Supplements but failed to produce a certificate from FSSAI, resulting in detention of goods. After producing necessary certificates for 15 items, part clearance was allowed. The remaining five items were dealt with, one abandoned, and four re-exported after payment of redemption fine. Subsequently, it was realized that no redemption fine was imposable on the re-exported goods. The appellant filed a refund claim under Section 26A of the Customs Act, 1962. However, the claim was found not maintainable due to the nature of the goods. The appellant then sought a drawback claim under Section 74 of the Act. Both the refund claim under Section 26A and the drawback claim under Section 74 were rejected. The appellant challenged this decision, arguing that the drawback claim was not time-barred.

The appellant contended that since they had initially claimed a refund under Section 26A and those proceedings were ongoing, they should be entitled to the benefit of Section 14 of the Limitation Act, 1963, to support their claim under Section 74. This argument was supported by referencing the decisions of M.P Steel Corporation. On the other hand, the respondent reiterated the findings of the impugned order.

The key issue was whether the drawback claim filed by the appellant under Section 74 of the Act was time-barred. The Tribunal noted that the appellant had initially filed a claim under Section 26A, and upon realizing its non-maintainability, filed the refund claim under Section 74. The Tribunal held that filing the refund claim under the wrong provision did not disentitle the legitimate claim of the appellant. The Tribunal found that the appellant had a substantive right to file the claim under the correct provisions of the Act. Therefore, the benefit of Section 14 of the Limitation Act, 1963 was available to the appellant. Consequently, the Tribunal held that the drawback claim filed under Section 74 was within time and directed the authorities to entertain the claim on merits.

In conclusion, the appeal was disposed of by way of remand, with the Tribunal holding that the appellant's drawback claim under Section 74 of the Customs Act, 1962 was not time-barred and should be considered on its merits in the interest of justice.