2014 (12) TMI 643 - HC - Customs

Interest on duty drawback claim - Jurisdiction of Tribunal to hear appeal from Commissioner s order on drawback claim - Section 129A(1) of Customs Act - Held that - Department has paid drawback amount only as per orders passed by the Tribunal and Department has not preferred any appeal. Simply because an appeal has not been preferred by the Department with regard to payment of drawback amount, the Court cannot come to a conclusion that the Department is precluded from raising a point with regard to the orders passed by the Tribunal in respect of payment of interest on drawback amount as per provision of Section 129A of the said Act. Therefore, viewing from any angle, the contention putforth on the side of the appellant is really having attractive force and the common substantial questions of law raised on the side of the appellant are legally sustainable - Decided in favour of Revenue.

Summary

Issues:
- Jurisdiction of CESTAT in hearing appeals related to payment of drawback
- Applicability of C.B.E. & C. Circular No. 57/95-Cus.
- Eligibility of respondent for drawback before CESTAT order

Jurisdiction of CESTAT:
The case involved exporters of Garments claiming drawback amount with interest, rejected by Deputy Commissioner of Customs and Commissioner of Appeals. CESTAT allowed appeals directing the Department to pay interest. The appellant raised questions on CESTAT's jurisdiction under Section 129A of the Customs Act, stating the Tribunal cannot handle matters related to drawback amount and interest. The appellant argued that Chapter X of the Customs Act, dealing with drawbacks and interest, is excluded from CESTAT's purview as per Section 129A.

Applicability of Circular and Eligibility:
The respondents' claims for interest on drawback were initially rejected by lower authorities but accepted by CESTAT. The respondents argued that the Tribunal rightly considered their interest claims, as the entire Chapter 10 of the Customs Act is not excluded from CESTAT's jurisdiction. They contended that the Tribunal's decision to allow interest claims was justified. The judgment highlighted that Chapter 10 of the Customs Act indeed covers drawback amounts and interest.

Legal Analysis and Conclusion:
The Court noted that Section 129A explicitly excludes matters related to Chapter X of the Customs Act from CESTAT's jurisdiction. Relying on past decisions, the Court supported the appellant's argument, emphasizing that CESTAT cannot handle issues concerning interest on drawback amounts. Despite the Department not appealing the drawback amount, the Court held that this does not prevent them from challenging the interest payment under Section 129A. Consequently, the Civil Miscellaneous Appeals were allowed, setting aside CESTAT's orders. The respondents were advised to seek remedies through revision before the Central Government.