2018 (9) TMI 672 - AT - Customs

Eligibility for drawback - goods that were exported as brass sanitary fittings valued at ₹ 76,75,321/- - Held that - The shipping bill, at the time of export of the goods, did not vary the original description of brass sanitary fittings . Had the goods been something other than that conformed to this description, it was incumbent upon the assessing authorities to have this description amended to that which was appropriate to the report of examination before allowing the export - There is substantial difference between nuts and bolts and sanitary fittings made of brass . In the absence of any evidence other than the examination report, the ground on which the drawback was denied by the competent authority does not appear to have the sanctity of law. It is difficult to accept the contention of Revenue that the goods that were exported were not brass sanitary fittings - appeal allowed - decided in favor of appellant.

Summary

Issues:
Eligibility for drawback on exported goods labeled as 'brass sanitary fittings' and the subsequent rejection of drawback claim, confiscation of goods, and imposition of fines and penalties.

Analysis:
The judgment pertains to appeals against an order-in-original by the Commissioner of Customs regarding the eligibility for drawback on goods exported as 'brass sanitary fittings.' The drawback claim of &8377; 13,81,558 was rejected, and approval was limited to &8377; 1,68,857 based on an examination report categorizing the goods as 'brass nuts and bolts' instead of 'brass sanitary fittings' as claimed. Additionally, the goods were confiscated, and fines and penalties were imposed on the exporter and the custom house agent.

During the hearing, it was noted that the original shipping bill did not deviate from the description of 'brass sanitary fittings' despite the discrepancy in the examination report. The judgment highlighted the lack of testing or verification of samples by the authorities before issuing the show cause notice or making a decision.

The tribunal emphasized the significant distinction between 'nuts and bolts' and 'sanitary fittings made of brass.' It was pointed out that without substantial evidence beyond the examination report, the grounds for denying the drawback lacked legal validity. The tribunal also criticized the competent authority for not ensuring the shipping bill accurately reflected the exported goods.

Ultimately, the tribunal found it challenging to agree with the Revenue's argument that the exported goods were not 'brass sanitary fittings.' Consequently, the impugned order was set aside, and the appeals were allowed. The judgment was pronounced in court on 29/08/2018.