2023 (4) TMI 724 - HC - Customs

Interest on delayed refund of drawback - denied on the ground that the drawback was pending for verification of information/ reply of queries in respect of two shipping bills and there was no delay - no discussion whatsoever regarding delayed payment in respect of other 15 shipping bills and the impugned communication is silent regarding same - section 75A of the Act of 1962 - HELD THAT - When a drawback payable to the claimant under section 75A of the Act of 1962 is not paid within the stipulated period therein, then interest at the rate fixed under section 27A from the date after the expiry of the said period till the date of payment of such drawback is applicable. Therefore, an enquiry is needed into each of the shipping bill as to when the drawback became due, when it was paid and then accordingly calculate the interest thereafter. This entire enquiry is clearly missing in the impugned order. Therefore, the impugned communications will have to be set aside and the application of the Petitioner for interest needs to be restored to the file. Application of the Petitioner made for interest under section 75A of the Act of 1962 is restored to the file of the Deputy Commissioner of Customs, NS-II, Drawback Section - The Deputy Commissioner of Customs will carry out exercise in light of section 75A of the Act of 1962 and take necessary steps in that regard within a period of twelve weeks from today - Petition disposed off by way of remand.

Summary

Issues involved:
The judgment involves the issue of interest on delayed refund of drawback under section 75A of the Customs Act, 1962.

Details of the Judgment:

Issue 1: Delayed refund of drawback
The Petitioner, a private limited company engaged in the export of readymade garments, applied for interest on delayed refund of drawback under section 75A of the Customs Act, 1962. The Petitioner claimed entitlement to drawback for exports made under 17 shipping bills. The impugned communications rejected the Petitioner's prayer for interest, citing pending verification of information for two shipping bills as a reason for delay. However, the communication failed to address the delayed payment issue for the remaining 15 shipping bills. The court held that a thorough inquiry into each shipping bill was necessary to determine the due date of drawback payment and calculate interest accordingly. As this inquiry was missing in the impugned order, the court quashed the communications and directed the Deputy Commissioner of Customs to conduct the required examination and take necessary steps within twelve weeks.

Conclusion:
The High Court of Bombay quashed the impugned communications dated 2 November 2020 and 13 May 2021, and restored the Petitioner's application for interest under section 75A of the Customs Act, 1962 to the Deputy Commissioner of Customs for further action. The court disposed of the writ petition accordingly.