2016 (6) TMI 68 - CGOVT - Customs

Demand of ineligible duty drawback with interest and imposition of penalty - Section 117 of the Customs Act, 1962 - Applicant were initially granted drawback for exports made by him - Sale proceeds realized beyond the stipulated period - Applicant claimed that sale proceeds were received by their bank within stipulated period and they have submitted the copies of Bank Realization Certificates (BRCs) in reply to impugned SCN but the same were not taken into consideration. Held that - the BRCs are required to be verified to determine its authenticity, validity and as to whether the export proceeds were received within stipulated period including any extensions by RBI as claimed by the applicant. Also, the BRCs submitted by the applicant must conform the manner and format as prescribed by the DGFT. As such, the cases are required to be remanded for fresh consideration. It was the responsibility of the applicant to submit evidence of receipt of sale proceeds immediately upon receipt which they admittedly failed to do. However, in the interest of justice, the applicant will submit these BRCs in original along with evidence that these were indeed submitted in response to the Show Cause Notice to enable verification of the same to the satisfaction of the original authority within 4 weeks of the receipt of this Order before the original Adjudicating Authority for consideration in accordance with provisions of law and passing suitable orders. The penalty in terms of Section 117 of customs Act, 1962 will also be re-determined accordingly by the original authority, subject to the outcome of the verification. Government therefore, sets aside impugned order and remands the case back to original authority for fresh consideration. - Revision Application disposed of

Summary

Issues:
Recovery of drawback amount due to non-realization of export proceeds within stipulated period, Submission of Bank Realization Certificates, Penalty imposed under Section 117 of Customs Act, 1962.

Analysis:
1. Recovery of Drawback Amount: The applicant, M/s Indian Apparels International, Tamilnadu, received a drawback amount of Rs. 1,47,445 for export claims. However, it was discovered that the export proceeds were not realized within the specified period as per Customs rules and the Foreign Exchange Management Act, 1999. Consequently, the adjudicating authority demanded the recovery of the drawback amount along with interest and imposed a penalty of Rs. 10,000 under Section 117 of the Customs Act, 1962 due to the non-realization of export proceeds within the stipulated time frame.

2. Submission of Bank Realization Certificates: The applicant contended that all export proceeds related to the shipping bill in question had been realized by them, and they had submitted Bank Realization Certificates (BRCs) in response to the show cause notice. However, the original authority did not consider these submissions, leading to the issuance of the Order-in-Original upheld by the Commissioner (Appeals). The applicant emphasized that they had provided the necessary documents and certificates to prove the realization of export proceeds, and there was no pending realization of export proceeds on their part.

3. Penalty Imposed: The penalty imposed under Section 117 of the Customs Act, 1962 was a point of contention in the revision application. The applicant requested a re-evaluation of the penalty in light of the submissions made regarding the realization of export proceeds and the submission of relevant documents. The Government directed the original authority to re-determine the penalty based on the outcome of the verification of the Bank Realization Certificates and other relevant evidence provided by the applicant.

4. Government's Decision: After a detailed review of the case, the Government observed that the verification of the Bank Realization Certificates submitted by the applicant was essential to ascertain the authenticity and validity of the export proceeds realization within the stipulated period. As a result, the Government set aside the impugned order and remanded the case back to the original authority for fresh consideration. The applicant was instructed to submit the original Bank Realization Certificates along with evidence of their submission in response to the Show Cause Notice for verification within a specified timeline. The penalty under Section 117 of the Customs Act, 1962 would be re-assessed based on the verification outcome.

In conclusion, the revision application was disposed of with the directive for a re-examination of the case by the original authority, ensuring a fair opportunity for all concerned parties and full cooperation from the applicant in providing the necessary documentation for verification.