2012 (8) TMI 900 - CGOVT - Customs

Recovery of fraudulently availed drawback of duty - applicants are claiming duty drawback (Drawback of Central Excise Portion) by providing wrong and incorrect information - Held that - Applicants claimed drawback of Central Excise portion in respect of goods exported vide various Shipping Bills detailed in the impugned Orders-in-Appeal. The admissibility of such drawback to merchant exporters is determined as per C.B.E. & C. Circular No. 54/2001-Cus., dated 19-10-2001. - During investigation, the veracity of said declaration furnished by applicants for availing drawback at higher rate could not be verified. The applicants did not submit the relevant annexures containing the requisite certificate despite issuance of summons. They neither appeared before Customs nor submitted the requisite documents. Rather they asked the Customs to procure said documents from their CHA. The printout of the Shipping Bills were retrieved from the EDI data. The investigation carried out could not verify the veracity of said certificates. Therefore the drawback claim were rightly denied. After investigation it has been conclusively proved that the applicant did not furnish details of supplier/manufacturer/job-worker and as such violated provisions of Circular No. 54/2001-Cus., dated 19-10-2001. Since, the violation is conclusively established, Government do not find any reason to consider applicant s contention regarding cross-examination as the same will not yield any substantial benefit in favour of the applicant - Decided against assessee.

Summary

Issues:
Fraudulent drawback claim, Natural justice principles, Retrospective effect of circular, Time limit for demand of drawback, Cross-examination opportunity violation.

Fraudulent Drawback Claim:
The revision applications were filed against Orders-in-Appeal by two applicants for recovery of fraudulently availed duty drawback of Central Excise portion. The applicants were found to have provided wrong information, leading to the recovery and imposition of penalties by the original authority. The applicants contended that the show cause notice was time-barred, lacked evidence of wilful misstatement, and violated natural justice principles by not allowing cross-examination.

Retrospective Effect of Circular:
The applicants argued that Circular No. 16/2009-Cus. should have retrospective effect based on a Supreme Court judgment. However, the government found that the circular was prospective, as it explicitly stated "henceforth." The government cited previous judgments emphasizing strict interpretation of statutes and the binding nature of circulars on departmental authorities.

Time Limit for Demand of Drawback:
The government noted that there was no specific time limit prescribed under Rule 16 of Drawback Rules for the recovery of wrongly sanctioned drawback. Since the applicants concealed vital information to avail duty drawback, the show cause notice was rightly issued invoking the extended period clause, and penalties were appropriately imposed.

Violation of Natural Justice Principles - Cross-Examination:
The applicants contended that the denial of the opportunity for cross-examination of officers violated natural justice principles. However, the government concluded that the violation was conclusively established based on the applicants' failure to provide required details, rendering the cross-examination request irrelevant.

Conclusion:
After thorough analysis, the government upheld the Orders-in-Appeal, finding no infirmity in them. The revision applications were rejected as devoid of merit. The judgment highlighted the importance of complying with statutory provisions, the binding nature of circulars, and the consequences of providing incorrect information for availing duty drawbacks.