2024 (6) TMI 1013 - AT - Customs

Denial of Drawback claims, based on testing samples - cross-examination of testing personnel sought, was not granted - no samples drawn in respect of 17 Shipping Bills - 16 Shipping Bills on which samples drawn and tests carried on - Non-verification of export proceedings in respect of all the 33 consignments - Interest on the drawback - Penalties - Confiscation. No samples drawn in respect of 17 Shipping Bills - HELD THAT - The exports have taken place in June and July 2002. Admittedly, no samples were drawn by the Department nor any samples were tested by NTCL or NIFT. In such a case, the Department could not have relied on the Test Report of NTCL/NIFT in respect of second lot of Shipping Bills to deny the Draw Back claim. In respect of first set of 17 Shipping Bills, on this count itself, the impugned Order is set aside and the Drawback claim of Rs. 38,63,529/- allowed subject to the condition specified. 16 Shipping Bills on which samples drawn and tests carried on - HELD THAT - As rightly pointed out by the Appellant, both the testing agencies have completed the test and also issued the Test Report in a record time of 24hrs/48hrs. This gives cause of some kind of doubt as to whether proper procedure was followed before coming to a conclusion about PMV. Secondly, though the Department itself has obtained both the certificates, the first one from NTCL and second one from NIFT, the Revenue has straightway proceeded on the assumption that only the NTCL Test Report is applicable. Non-verification of export proceedings in respect of all the 33 consignments - HELD THAT - It is seen from the records that the Appellant has been claiming that they have received the export proceedings in respect of all the 33 consignments. This fact has not been verified at the Adjudication level. Only for the limited purpose of verifying the BRC in respect of the 33 Consignments, the matter remanded back to the Adjudicating Authority. If on verification the fact is found to be correct, the Appellant should be granted the refund of the drawbacks in respect of both the sets of exports as per law. As the original Appellant has been substituted by the present appellant by way of the Misc. Order cited supra, the refund amount is to be granted to her. Interest on the drawback - HELD THAT - The Appellant has also prayed that they would be eligible for interest on the drawback which is being paid to them now since they have filed the drawback claim in 2002 itself. The Adjudicating Authority is directed to go through the statutory provisions and case laws on this issue and accordingly grant the refund of the drawback and interest, if any, as per law. Penalties - Confiscation - HELD THAT - Since the Appeal is being allowed, all the penalties imposed and confiscation ordered stand set aside. Since the issue pertains to the year 2002, the Adjudicating Authority is directed to complete the proceedings within 3 months from the date of communication of this Order.

Summary

Issues:
The issues involved in this case are the denial of Drawback claims by the Department based on sample testing reports, the refusal of cross-examination of testing personnel, and the verification of export proceeds.

Denial of Drawback Claims Based on Sample Testing Reports:
The Appellant exported T-shirts and Gents shirts under Shipping Bills during specific periods. The Department drew samples for testing, and reports were obtained from NTCL, Calcutta, and NIFT, Delhi. The Adjudicating Authority rejected the Drawback Claims relying on these reports. The Appellant contended that proper procedures were not followed in testing, and cross-examination of testing personnel was denied. The Tribunal remanded the matter for cross-examination, but the Adjudicating Authority proceeded without granting it. The Tribunal found the Order rejecting the claims legally unsustainable and allowed the Drawback claim for the first set of Shipping Bills.

Refusal of Cross-Examination of Testing Personnel:
The Appellant argued that the testing agencies issued reports too quickly, raising doubts about the testing procedures. They sought cross-examination of the testing personnel, which was denied by both entities. The Adjudicating Authority proceeded without granting cross-examination, contrary to the Tribunal's directive. The Tribunal found this refusal unjust and set aside the Order, allowing the Drawback claim for the second set of Shipping Bills.

Verification of Export Proceeds:
The Appellant claimed to have received export proceeds for all consignments, but this was not verified by the Adjudicating Authority. The Tribunal remanded the matter for verification of Bank Realization Certificates (BRC) for all consignments. If the BRC verification confirms the receipt of export proceeds, the Appellant is entitled to refunds as per law. The Tribunal also directed the Adjudicating Authority to consider interest on the drawback claim filed in 2002 and to complete all proceedings within three months.