2001 (1) TMI 339 - HC - Customs

Summary

Issues Involved:
1. Rejection of the application for drawback duty.
2. Question of alternative remedy.
3. Jurisdiction of the authority.
4. Allegation of fraudulent export.

Detailed Analysis:

1. Rejection of the Application for Drawback Duty:
The petitioner challenged the impugned order rejecting the application for drawback duty on the grounds that the consignee did not receive the goods, alleging fraudulent export. The petitioner argued that the application for drawback duty should be decided based on whether the goods were entered for export and cleared by Customs under Section 75 of the Customs Act, 1961, not on whether the consignee received the goods. The court noted that once the Customs Authority clears the goods for export and the consideration is received, the conditions under Section 75 are fulfilled, and the benefit of drawback duty should be granted. The court referenced a Supreme Court decision stating that "export means that the goods must be taken out to a place outside India," and the receipt of goods by the consignee is irrelevant for granting drawback duty.

2. Question of Alternative Remedy:
The department argued that the writ petition should not be entertained due to the existence of an alternative statutory remedy. The court examined the principles laid down by the Supreme Court, noting that the existence of an alternative remedy is not an absolute bar to entertaining a writ petition. The court decided to entertain the writ petition, emphasizing that the matter involved a question of jurisdiction and compliance with previous court orders, which warranted judicial scrutiny.

3. Jurisdiction of the Authority:
The petitioner contended that the authority acted beyond its jurisdiction by issuing a show cause notice and rejecting the application based on the consignee not receiving the goods. The court agreed, stating that the authority's jurisdiction under Section 75 is limited to examining whether the goods were entered for export and cleared by Customs. The court found that the authority's actions were ultra vires and amounted to a breach of natural justice principles. The court emphasized that the authority should not investigate the receipt of goods by the consignee, as this falls outside the scope of Section 75.

4. Allegation of Fraudulent Export:
The department alleged that the export was fraudulent, as the consignee did not receive the goods. The court rejected this argument, stating that the authority's conclusion of fraud was based on unacceptable materials and amounted to a finding on no evidence. The court held that the authority could not undertake such an investigation under Section 75 and that the allegations of fraud did not affect the fulfillment of conditions for granting drawback duty. The court directed the authority to reconsider the application afresh, treating the export as having taken place and deciding the matter in accordance with the law and previous court observations.

Conclusion:
The court set aside the impugned order rejecting the application for drawback duty and directed the authority to reconsider the application within the parameters of Section 75 and the rules framed thereunder. The court emphasized that the authority should treat the case as an export having taken place and decide the matter in accordance with the law, considering whether the conditions for granting drawback duty were fulfilled. The writ petition succeeded, with no order as to costs.