2022 (5) TMI 29 - HC - Customs

Duty drawback - Switch-over from EOU to Export Promotion of Capital Goods Scheme (EPCG) - Rule 12 of the Customs and Central Excise Duties and Service Tax Drawback Rules - HELD THAT - This court is of the view that there is no necessity to appreciate the factual matrix of the case in detail. Admittedly, two different authorities had taken different views as regards the claim of the respondent seeking duty draw back. Therefore, the learned Judge, while disposing of the writ petitions, directed both the authorities to take a uniform and consistent approach in deciding the respondent's claim. Though the learned senior panel counsel appearing for the appellants submitted that the two different authorities have exercised their respective discretions under the Act and the same have nothing to do with the consideration of the claim of the respondent, the same cannot be countenanced by this court, as it is eminently desirable that there should be an uniformity of construction by the authorities in applying the relevant provisions of the Act and policy. The application of the respondent seeking duty drawback, be placed before an independent officer in the rank of Chief Commissioner, within a period of two weeks from the date of receipt of a copy of this order. The said officer shall re-visit the issue relating to the eligibility of the respondent and decide the same, on merits and in accordance with law, after affording opportunity of hearing to them - Appeal disposed off.

Summary

Issues:
1. Dispute regarding duty drawback entitlement for switching from EOU to EPCG scheme.
2. Conflict between different authorities' views on duty drawback claim.
3. Judicial directions for uniformity in decision-making by authorities.

Analysis:
1. The respondent sought duty drawback after switching from EOU to EPCG scheme. The Development Commissioner approved their request, and the respondent communicated their intention to switch schemes. They quantified estimated duty liability and obtained necessary approvals. Despite initial approvals, subsequent requests for duty drawback were met with challenges from customs authorities, leading to legal proceedings.

2. The Commissioner of Customs (Airport) and Commissioner of Customs (Seaport) had differing views on the duty drawback claim. The court intervened, setting aside previous decisions and directing authorities to reevaluate the claim independently without external influence. The conflicting stances highlighted the need for consistency in decision-making to ensure fairness and adherence to legal provisions.

3. The court emphasized the importance of uniformity in applying customs laws and policies. It criticized the lack of reasoned orders supporting the authorities' decisions and stressed the need for a detailed rationale for any variation in decision-making. To resolve the issue, the court directed an independent officer to review the duty drawback application, ensuring a fair assessment based on merits and legal requirements within a specified timeframe to uphold justice and procedural integrity.