2012 (9) TMI 347 - HC - Customs

Drawback claim - conversion of shipping bill from DEPB scheme to Duty Drawback Scheme - Assistant Commissioner, rejected the claim of the petitioner treating the same as a claim for conversion from DEPB scheme to draw back scheme, on the ground that the petitioner s claim for DEPB scheme has not been denied, which is a condition precedent for conversion of the claim under the DEPB scheme to one under the Drawback scheme Held that - Power to consider the claim under the proviso to Rule 12 is squarely on the Commissioner of Customs. As such, the Assistant Commissioner of Customs was bound to place the matter before the Commissioner of Customs for an order under the proviso to Rule 12(1) of the Drawback Rules - Assistant Commissioner had not done that - 3rd respondent directed to consider the claim of the petitioner for benefits under the drawback scheme by exercising his discretion under the proviso to Rule 12(1)

Summary

Issues:
1. Jurisdiction of Assistant Commissioner to reject petitioner's claim under Drawback Rules.
2. Interpretation of Rule 12 and the proviso regarding claiming benefits under the drawback scheme.
3. Compliance with circulars and the discretion of the Commissioner of Customs.

Analysis:
1. The petitioner, engaged in export business, initially sought benefits under the DEPB scheme but later decided to claim drawback under the Customs, Central Excise Duties, and Service Tax Drawback Rules. The Assistant Commissioner rejected the claim, stating that denial of DEPB benefits was a prerequisite for conversion to the drawback scheme. Petitioner argued that the Assistant Commissioner lacked jurisdiction as Rule 12 grants the Commissioner discretion to exempt exporters from compliance. The court agreed, directing the Assistant Commissioner to refer the claim to the Commissioner for consideration.

2. The respondents contended that the petitioner could not seek conversion to the drawback scheme as their DEPB claim had not been denied. However, the court highlighted Rule 12, emphasizing the proviso granting the Commissioner authority to waive conditions for claiming drawback benefits. The court clarified that the petitioner could independently seek benefits under the proviso without requiring denial of DEPB benefits, as evidenced by the latest Circular dated 23-9-2010, which liberalized the conversion process.

3. The court analyzed Rule 12 in detail, emphasizing the Commissioner's power under the proviso to waive conditions for claiming drawback benefits. The court noted that the Assistant Commissioner failed to refer the matter to the Commissioner, wrongly assuming the claim was for conversion between schemes. The court directed the Assistant Commissioner to present the petitioner's claim to the Commissioner promptly, ensuring a fair hearing for the petitioner. The petitioner confirmed abandoning their DEPB claim, reinforcing the focus on claiming benefits under the drawback scheme.