2016 (11) TMI 854 - HC - Customs

Acceptance of Bank Realization Certificate (BRC) as proof of export and realization of export proceeds of the shipment - duty drawback - the claim of the respondent that drawback be recovered by the petitioner, as the petitioner failed to produce evidences for having realized the sale proceeds in foreign exchange exports made within the stipulated period of six months in the form of BRC, justified? - whether the dismissal of the petitioner s appeal as not maintainable by the Commissioner (Appeals) would disentitle the petitioner to the relief sought for? - Held that - on perusal of the order passed by the Commissioner (Appeals) it is seen that the appeal filed by the petitioner was rejected as time barred. If that is so, the findings rendered by the Commissioner (Appeals) in paragraph 8.3 commenting upon the non-submission/belated submission of the BRC should be held to be without jurisdiction since the Commissioner (Appeals) could not have rendered the findings on merits when the appeal itself is held to be not maintainable. Therefore, the findings rendered in paragraph 8.3 of the order passed by the Commissioner (Appeals) has to be necessarily eschewed. So the first question is decided in favour of the petitioner. Whether the Department could refuse to consider the petitioner s case when admittedly the Original Authority did not examined as to whether the BRC were submitted within the time permitted? - Held that - since the petitioner failed to respond to the notices issued by the authorities on 07.11.2006 and 15.06.2007, the Original Authority proceeded exparte and concluded that the petitioner has not produced the BRC. Therefore, they have to pay a sum of ₹ 20,69,545/- which they have availed as duty drawback. Thus, it is clear that at no point of time, the petitioner s case was adjudicated by the authority to ascertain as to whether the BRC produced by the petitioner along with their letters dated 23.11.2006 and 27.07.2007 to the Assistant Commissioner, ICD, Tirupur merits consideration. Therefore, merely because the Original Authority has decided exparte cannot operate as estoppel and the Department cannot refuse to consider the factual position, especially when the petitioner has prima facie established before this Court that they have produced the BRC before the concerned authority at Tirupur. Therefore, de hors the finding rendered by the Commissioner (Appeal) as well as the respondent, the petitioner s request for considering their drawback claim should be independently adjudicated by the authority. Petition disposed off - matter on remand to adjudicate the correctness of the claim made by the petitioner pursuant to their letters dated 23.11.2006 and 27.07.2007 and after issuing show cause notice to the petitioner, the proceedings shall be finalized on merits and in accordance with law.

Summary

Issues Involved:
1. Writ of Mandamus to forbear the respondent from recovering a sum of ? 20,69,545/-
2. Challenge against the recovery order and penalty imposition under Section 117 of the Customs Act, 1962
3. Appeal filed by the petitioner being rejected as time-barred
4. Dispute regarding submission of Bank Realization Certificate (BRC) as proof of export proceeds
5. Consideration of the petitioner's claim for duty drawback

Analysis:
1. The petitioner sought a writ of Mandamus to prevent the respondent from recovering ? 20,69,545/- and accept the Bank Realization Certificate (BRC) as proof of export proceeds. The petitioner availed the Duty Drawback Scheme but faced recovery notices due to alleged failure in producing evidence of realizing sale proceeds in foreign exchange. The petitioner contended that they submitted the BRC to the authority, which was acknowledged. The Commissioner (Appeals) found the petitioner's appeal time-barred and imposed a penalty. However, the Court held that the dismissal of the appeal did not disentitle the petitioner from relief sought.

2. The second issue involved the authority's refusal to consider the petitioner's case due to non-response to notices. The Original Authority proceeded ex parte, ordering the petitioner to pay the duty drawback amount. The Court noted that the authority did not adjudicate whether the BRC submitted by the petitioner was considered. The Court held that the authority cannot refuse to consider the factual position merely because of the ex parte decision. The Court directed the respondent to independently adjudicate the petitioner's claim based on the submitted BRC.

3. The Court emphasized that the Commissioner (Appeals) findings on the non-submission of BRC should be disregarded since the appeal was rejected as time-barred. The Court directed the respondent to adjudicate the correctness of the petitioner's claim based on the submitted BRC and issue a show cause notice, finalizing the proceedings within three months. The respondent was instructed not to be influenced by previous findings and expeditiously resolve the matter.

This judgment clarifies the importance of due process in adjudicating claims, emphasizing the need for authorities to consider evidence presented by parties before making decisions.