2000 (6) TMI 612 - AT - Customs

Summary

Issues Involved:
1. Rejection of Duty Drawback claims.
2. Allegation of fictitious firms.
3. Procedural irregularities in claim submission.
4. Authorization of T.O.L. to receive Duty Drawback.

Detailed Analysis:

1. Rejection of Duty Drawback claims:
The Commissioner of Customs rejected the Duty Drawback claims made by M/s. Terai Overseas Limited (T.O.L.) on the grounds that the firms involved, M/s. Aruna Impex and M/s. Dugar Impex, were fictitious and that T.O.L. did not have the necessary authorization to claim the drawback. The Commissioner also noted procedural deficiencies in the submission of the claims. However, the adjudicating authority found no evidence that the appellants had exported goods of dubious quality, leading to the dropping of proposals for penalties and confiscation of sale proceeds.

2. Allegation of fictitious firms:
The Customs Authority alleged that M/s. Aruna Impex and M/s. Dugar Impex were fictitious firms based on returned summons and show cause notices. The Commissioner held these firms as non-existent. However, the Tribunal found this reasoning contradictory since the Commissioner acknowledged the exports made by these firms as genuine. The Tribunal emphasized that returned postal documents cannot be the sole basis for deeming firms fictitious, especially when the firms had participated in the adjudication process and provided detailed replies to the show cause notice.

3. Procedural irregularities in claim submission:
The Commissioner cited procedural irregularities, such as the cancellation of the Insurance Certificate and non-compliance with Rule 9(c) and Rule 13(2)(iv) of the Drawback Rules. The Tribunal found that the appellants were not asked by the Revenue to provide additional information under Rule 9(c), and the initial submission of the Insurance Certificate should suffice despite its subsequent cancellation. The Tribunal referenced the Supreme Court's judgment in Fertilizers Corporation of India v. State of Bihar, emphasizing that procedural irregularities should not negate the substantive benefit of Duty Drawback if the primary conditions of export and realization of proceeds are met.

4. Authorization of T.O.L. to receive Duty Drawback:
The Tribunal noted that Rule 14 of the Drawback Rules allows for the drawback to be paid to an agent authorized by the exporter. M/s. Aruna Impex and M/s. Dugar Impex had executed a Power of Attorney authorizing T.O.L. to receive the drawback. The Tribunal found the Commissioner's rejection of this authorization baseless, especially since the two firms confirmed their authorization in unequivocal terms. The Tribunal concluded that T.O.L. was entitled to the Duty Drawback claims as the authorized agent.

Conclusion:
The Tribunal allowed the appeals of M/s. T.O.L., directing the Customs Authorities to sanction the Duty Drawback claim to T.O.L. The appeals filed by M/s. Aruna Impex and M/s. Dugar Impex were disposed of as they were only supporting T.O.L.'s claim and sought no separate relief.