2018 (9) TMI 460 - HC - Customs

Recovery of Drawback Claim granted earlier - attachment of bank accounts - respondent bank has been requested to hold all outward transactions (debit in any form) in respect of the current account maintained by the petitioner. - Held that - This Court finds that though, as on date, the petitioner is not eligible to avail the drawback claim, which had been availed in the year 2013, the same is in the stage of investigation as regards quantum of drawback eligible apart from the fact of non-remittance of foreign exchange within the time permitted. In any event, there should have been a demand raised to the petitioner, which appears to have been not issued till date - while permitting the Directorate of Revenue Intelligence to continue investigation, the petitioner should be permitted to operate their bank account by simultaneously protecting the interests of the Revenue. The amount of drawback claim availed by the petitioner is ₹ 80 lakhs approximately. The writ petition is disposed of with a direction to the petitioner to furnish bank guarantee for 25% of the drawback claim availed by the petitioner (25% of ₹ 80 lakhs) to the satisfaction of the third respondent or any other appropriate authority of the Customs Department and execute a bond in the proper format for the differential amount to the satisfaction of the appropriate officer.

Summary

Issues:
1. Quashing of communication sent by the first respondent to the fifth respondent.
2. Petitioner's eligibility to avail drawback claim.
3. Investigation by the Directorate of Revenue Intelligence.
4. Permission for the petitioner to operate their bank account.
5. Conditions imposed on the petitioner for compliance.

Analysis:
1. The petitioner sought to quash a communication requesting the fifth respondent bank to restrict outward transactions and allow only inward payments in connection with an investigation against the petitioner. The High Court noted that the petitioner had availed drawback claim in 2013, and while the investigation was ongoing, no demand had been raised to the petitioner. The Court allowed the Directorate of Revenue Intelligence to continue the investigation but permitted the petitioner to operate their bank account to protect their interests, subject to certain conditions.

2. It was established that the petitioner had availed a drawback claim in 2013, and foreign remittances had not been received within the stipulated time. The Directorate of Revenue Intelligence initiated an investigation into the alleged inflation of export value concerning the drawback claims. The Court acknowledged that the petitioner was not currently eligible for the drawback claim but emphasized that a formal demand had not been issued to the petitioner. The Court directed the petitioner to furnish a bank guarantee for 25% of the drawback claim amount and execute a bond for the differential amount within two weeks to lift the restrictions on their bank account.

3. The Directorate of Revenue Intelligence had commenced an investigation into the drawback claims availed by the petitioner, alleging inflated export values. The petitioner had responded to the summons and expressed willingness to cooperate with the investigation. The Court allowed the investigation to proceed while ensuring that the petitioner could operate their bank account by complying with the specified conditions, including providing a bank guarantee and executing a bond.

4. The High Court balanced the interests of the Revenue and the petitioner by allowing the investigation to continue while enabling the petitioner to access their bank account. The Court emphasized the need for the petitioner to cooperate fully with the Directorate of Revenue Intelligence and appear as required. The judgment highlighted the importance of protecting the interests of both parties while ensuring compliance with the legal procedures.

5. In conclusion, the writ petition was disposed of with directions for the petitioner to fulfill specific conditions within a specified timeframe to lift the restrictions on their bank account. The Court emphasized the importance of cooperation with the investigation and compliance with the prescribed requirements. No costs were awarded, and the related applications were closed as a result of the judgment.