2022 (10) TMI 269 - HC - Customs

Refund claim - Advance Authorization Scheme - deemed export of plate heat exchanger to Bharat Heavy Electrical Limited (BHEL) - non-fulfilment of export obligation - It is petitioner s case that due to reasons beyond their control they were unable to submit the remaining two invoices that were covered under Form 1-C dated 17th June 2014 - HELD THAT - The respondent no.3 in his letter to petitioner in effect admits that petitioner had complied with the export obligation because in the letter dated 19th January 2015 respondent no.3 states Had these invoices and Consumption certificate been submitted earlier, there would not have been any excess import and hence, no duty or interest would have been required to be paid . Respondent no.3 in another letter dated 23rd August 2016 also admits that had petitioner submitted the two invoices earlier, the office of DGFT would have processed the same for redemption and there would not have been any liability to pay custom duty plus interest. The only reason why it was rejected was due to non-reversal of redemption in the computer system. The indisputable position is petitioner has fulfilled its export obligations and, therefore, respondent no.3 should have issued the discharge certificate. It is rather strange that a genuine case has been rejected by respondent no.3 only because the computer system in his office would not permit reversal of redemption - the PRC also has rejected petitioner s application without giving any reason more so when respondent no.3 itself has admitted that petitioner has fulfilled the export obligations but missed the bus because it did not submit the documents earlier. Petition disposed off.

Summary

Issues:
1. Refusal to issue a fresh redemption certificate for customs duty refund due to inadvertent missing invoices.
2. Rejection of refund claim by Customs Authorities and Commissioner (Appeals).
3. Denial of Policy Relaxation Committee (PRC) application without reason.
4. Compliance with export obligations by the petitioner.

Analysis:
1. The petitioner, engaged in manufacturing heat exchangers, imported items duty-free for manufacturing under an Advance Authorization. Due to missing invoices, customs duty was paid. The petitioner sought a fresh redemption certificate for refund, but the request was rejected, citing non-reversal of redemption in the system.

2. The Customs Department advised the petitioner to obtain clarification from respondent no.3 regarding the missing invoices. Despite respondent no.3 admitting that submission of the invoices earlier would have avoided duty payment, the request for refund was rejected by Customs Authorities and Commissioner (Appeals).

3. The petitioner's appeal to the Commissioner (Appeals) was dismissed, with the option to seek reconsideration from respondent no.3 for a fresh Export Obligation Discharge Certificate (EODC). The subsequent application to the PRC was rejected without providing any reason, leading to the petitioner filing a petition against the PRC's decision.

4. The High Court found that the petitioner had fulfilled its export obligations, as acknowledged by respondent no.3. The court quashed the PRC's rejection order and directed respondent no.3 to issue the EODC, ensuring the petitioner receives the refund with accumulated interest from respondent no.4 within four weeks.

In conclusion, the High Court's judgment favored the petitioner, emphasizing the fulfillment of export obligations and directing the concerned authorities to issue the necessary certificates for the refund of customs duty paid erroneously.