2024 (8) TMI 479 - AT - Customs

Rejection of Duty Drawback claim - Export of non-Basmati Rice - whether the rejection of drawback claim holding that the appellant has not established that they had not filed drawback shipping bill at the time of export due to reasons beyond their control is legal and proper? - HELD THAT - The Commissioner has a discretion to allow the claim of drawback even though free shipping bill is filed, if he is satisfied that the exporter had not filed the draw back shipping bill for reasons beyond his control. The Commissioner has taken the view that the appellant has not adduced evidence to show that there were reasons beyond his control. It is found the said conclusion to be not justifiable and erroneous. The Ld. Counsel for the appellant has explained the difference in the Notifications which mentions the Cereals / list of Cereals. This has caused confusion to the appellant by which the draw back claim was not made at the time of export. It is convincing that the appellant has made out sufficient grounds for not filing draw back shipping bills. The Board Circular is binding upon the Department. The Commissioner ought to have exercised the discretion judiciously and not in a mechanic way. The impugned order is set aside - appeal allowed.

Summary

Issues:
1. Whether the rejection of drawback claim due to failure to establish reasons beyond control for not filing drawback shipping bill at the time of export is legal and proper.

Analysis:
The appellant exported non-Basmati Rice to Maldives without claiming draw back initially but later realized eligibility for 1% draw back as per Notification No. 68/2011. Despite filing requests for conversion of shipping bills to draw back bills, the Original Authority rejected the claim citing insufficient grounds for not claiming draw back initially, leading to the appeal.

The appellant's counsel argued that the Commissioner could allow draw back even if a free shipping bill was filed, as per Board Circular No. 36/2010-Cus, under certain conditions. The appellant's confusion arose from the different notifications regarding eligibility for draw back for Cereals, including rice. The appellant's failure to claim draw back initially was attributed to this confusion, and it was argued that the appellant had valid reasons beyond their control for not filing draw back shipping bills.

The Tribunal noted that the Commissioner had discretion to allow draw back even for free shipping bills if satisfied that the exporter had valid reasons beyond their control for not filing draw back shipping bills. The Tribunal found the Commissioner's conclusion unjustifiable and erroneous, considering the appellant's explanation regarding the confusion caused by differing notifications on Cereals. The Tribunal held that the appellant had provided sufficient grounds for not initially filing draw back shipping bills, emphasizing that the Board Circular was binding and that the Commissioner should have exercised discretion judiciously.

Consequently, the Tribunal set aside the impugned order, allowed the appeal, and granted consequential reliefs as per law, recognizing the appellant's eligibility for drawback based on the valid reasons presented for not filing draw back shipping bills initially.