2018 (7) TMI 451 - AT - Customs

Duty Drawback - N/N. 68/2011-Cus (NT) dt. 22.09.2011 - appellant contended that no test was conducted on the samples drawn from the exported goods - Held that - The goods were finally assessed as Mild Steel Stranded wire as declared by the exporter. It is noted that the assessment orders were not challenged by the dept. - The Tribunal in the case of TVS Motor Co. Ltd. v. CCE & ST, Mysore 2017 (6) TMI 163 - CESTAT BANGALORE allowed the refund in an identical situation - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Duty drawback claim rejection under Notification No.68/2011-Cus (NT).
2. Discrepancy in Bills of Export and Bills of Entry.
3. Requirement of foreign exchange realization certificate for refund eligibility.
4. Export of goods under free warranty replacement and its impact on refund eligibility.
5. Challenge to finality of refund orders and parallel recovery proceedings.

Analysis:
1. The appeal was against the rejection of duty drawback claim under Notification No.68/2011-Cus (NT) for Mild Steel Stranded wire. The show cause notice proposed to reject the claim of ?3,36,814, which was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals).

2. The discrepancy in Bills of Export and Bills of Entry was highlighted by the appellant, emphasizing that no tests were conducted on the exported goods and they were assessed as Mild Steel Stranded wire as declared by the exporter. The Tribunal's decision in a similar case supported the refund in such situations.

3. The issue of foreign exchange realization certificate for refund eligibility was raised, with the appellant arguing fulfillment of substantial requirements under Notification No. 17/2009-S.T. The appellant contended that the condition of realization of sale proceeds should be read in consonance with FEMA, 1999, and cited relevant regulations and judicial precedents to support their claim.

4. The appellant exported goods under free warranty replacement, asserting that the recovery of export proceeds did not arise under FEMA as the goods were not due for payment. The appellant argued that the condition in the notification should be considered fulfilled even when the amount due to be realized is nil, supported by legal references and decisions.

5. The finality of refund orders and parallel recovery proceedings were debated, with the appellant contending that the orders sanctioning the refund had attained finality and the Revenue could not initiate new proceedings without challenging those orders. The Tribunal found the impugned order unsustainable in law, setting it aside and allowing the appeal filed by the appellant.