2023 (2) TMI 493 - HC - Customs

Duty drawback - Re-fixation of brand rates by Respondent No.4 - Petitioner challenged the order refixing the brand rates on the ground of lack of jurisdiction in Respondent No.4 to re-fix/ revise the brand rates and without prejudice on the merits of the re-fixation/ revision - power of Respondent No.4 to re-fix or revise the brand rates fixed under Rule 7 of the Rules of 1995 - if the power exists and is properly utilized, then whether on merits, such re-fixation of brand rates was necessary? HELD THAT - The Revisional Authority has referred to Circular No.83/2003, dated 18 September 2003, on the aspect of jurisdiction and observed that the clarification given in para (c) of the impugned Circular undoubtedly states that the Commissioner of Central Excise and the officers under his control have been invested with powers to rectify such mistakes through issuance of any amendment, addendum or corrigendum to the brand rate letters issued. As such, the interpretation of the relevant portion of the above Circular spelt out in the impugned order in the appeal is flawed and improper. The Revisional Authority, therefore, held that the re-fixation of the brand rates was just and proper and that the orders of the Commissioner were within the jurisdiction. In the present case, the re-fixation of brand rates has not been carried out by the Ministry upon complaint or on the investigation; therefore, clause 3(d) does not arise in the present case, nor is stated so by the Revisional Authority. It is found that the reasoning of the Revisional Authority on the aspect of jurisdiction is entirely unsatisfactory. Apart from the facts of the individual case, when the question of the power of authority comes up for consideration, it has to be dealt with carefully as it sets a precedent to the authorities below and, therefore, the Revisional Authority was under a duty to scrutinize this aspect carefully. Except referring to the language of the Circular dated 18 September 2003, the Revisional Authority has not examined whether any amendment, addendum or corrigendum was carried out or that order existed even what is stated in clause 3(c) of the Circular dated 18 September 2003. The impugned order dated 15 September 2020 passed by Respondent No.2- Revisional Authority is quashed and set aside - Matter restored back.

Issues Involved:
1. Jurisdiction of Respondent No.4 to re-fix or revise the brand rates fixed under Rule 7 of the Customs Central Excise Drawback Rules, 1995.
2. Merits of the re-fixation of brand rates if the power exists and is properly utilized.

Detailed Analysis:

1. Jurisdiction of Respondent No.4:

The primary issue addressed is whether Respondent No.4 had the authority to re-fix or revise the brand rates initially fixed under Rule 7 of the Customs Central Excise Drawback Rules, 1995. The Petitioner argued that Respondent No.4 lacked jurisdiction to re-fix the brand rates, contending that such actions amounted to a review of its own orders, which is not permissible under the law. The Commissioner (Appeals) had previously ruled in favor of the Petitioner, stating that Respondent No.4 did not have the power to re-fix the brand rates and that such re-fixation was incorrect on merits.

The Respondents, however, contended that the re-fixation was done under Rule 16 of the Rules of 1995, supported by CBEC Circulars dated 6 March 2003 and 18 September 2003. Rule 16 pertains to the repayment of erroneous or excess payment of drawback and interest, allowing the proper officer of Customs to demand repayment of any erroneously paid amounts. The Commissioner (Appeals) found that the power under Rule 16 could not be traced to the actions of Respondent No.4, and that any withdrawal of rates under Rule 7(4) could only be done by the Central Government.

The Revisional Authority, however, upheld the Respondents' contentions, referencing Circular No.83/2003-Cus dated 18 September 2003, which states that the Commissioner of Central Excise and officers under his control have the power to rectify mistakes through amendments, addenda, or corrigenda to the brand rate letters issued. The Revisional Authority concluded that the re-fixation of brand rates by Respondent No.4 was within jurisdiction.

Upon review, the Court found the Revisional Authority's reasoning unsatisfactory, noting that the authority failed to properly scrutinize whether the actions taken were indeed amendments, addenda, or corrigenda as prescribed by the Circular. The Court emphasized the importance of careful examination when determining the power of an authority, as it sets a precedent. Consequently, the Court set aside the order of the Revisional Authority and remanded the revision for reconsideration, highlighting that the issue of jurisdiction goes to the root of the matter.

2. Merits of the Re-fixation of Brand Rates:

Given that the jurisdictional issue was pivotal, the Court noted that if the Petitioner succeeded on this ground, the merits of the re-fixation would not arise. The Court did not delve into the merits of the re-fixation in detail, as the jurisdictional question needed to be resolved first. However, the Court allowed for the possibility that, upon remand, contentions on both jurisdiction and merits could be raised by the parties. The Revisional Authority was instructed to hear the revision on merits within six weeks from the date the parties appear before it, ensuring a thorough and lawful reconsideration of the case.

Conclusion:

The Court quashed and set aside the impugned order dated 15 September 2020 by the Revisional Authority, restoring the revision to the file of Respondent No.2 for a decision as per law. The Court's observations were limited to the necessity of remand, and the revision application would be decided on its own merits upon remand. The Court emphasized the need for a careful and detailed examination of the jurisdictional issue, setting a precedent for proper legal scrutiny in such matters.

← Previous Next →