2019 (6) TMI 1161 - HC - Customs

Duty Drawback - amendment of shipping bill - rejection of Drawback on the ground that duty was paid in DEPB Scrip - HELD THAT - The Court did not elaborately dwell upon their contention qua the effect of incorrect mentioning of scheme code, as in the instant case, the same was wholly uncalled for. The respondent department could not have resurrected such a ground for denying the Drawback claim when the order at page Nos. 56 to 62 were passed after due verification of all the documents by the Competent Authority pursuant to order of this Court and adjudication of the matter in form of order dated 6-5-2016, rendered by this Court in Special Civil Application No. 8025 of 2015. The respondents were left with no option but to release the Drawback. In light thereof the respondents action for seeking amendment and holding out the provisions of Section 149, in our view was nothing but uncanny attempt to avoid the eventualities, which unfortunately compelled the petitioners to approach this Court for no reasons, as had the authorities acted in accordance with law and processed the Drawback claim after the order at page Nos. 56 to 62 was passed, the petitioners consternation could have been avoided. We are of the considered view that this petition is required to be allowed and respondents are therefore, directed to process the Drawback claim based upon the order at page Nos. 56 to 62 without any further delay and insistence upon rectifying the entry, as in our view it hardly matters, so far as clearance of Drawback claim is concerned. Petition allowed.

Summary

Issues Involved:
1. Illegal denial of duty drawback claims.
2. Rejection of shipping bill amendment request.
3. Violation of petitioners' fundamental rights under Article 14 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Illegal Denial of Duty Drawback Claims:
The petitioners approached the High Court under Article 226 of the Constitution, challenging the denial of duty drawback claims amounting to ?20,69,357/-. The petitioners argued that the denial was based on untenable objections, violating their fundamental rights under Article 14. Initially, the petitioners' drawback claims were rejected on the grounds that duty was paid using DEPB Scrip instead of cash. This rejection was overturned by the Commissioner (Appeals) and subsequently upheld by the Joint Secretary, Government of India. However, the High Court, in Special Civil Application No. 8025 of 2015, ruled in favor of the petitioners, directing the Customs authorities to determine the specific brand rate of drawback.

2. Rejection of Shipping Bill Amendment Request:
Despite the High Court's ruling, the Customs authorities refused to pay the drawback, citing the incorrect scheme code (20 instead of 47) in the shipping bills. The petitioners requested an amendment to the shipping bills to correct the scheme code, but this request was denied by the Deputy Commissioner of Customs (Drawback), who argued that the amendment was not permissible under Section 149 of the Customs Act. The petitioners contended that this refusal was unreasonable and unauthorized, as the scheme code is merely a procedural requirement and not mandated by the Customs Act or Drawback Rules.

3. Violation of Petitioners' Fundamental Rights:
The petitioners argued that the denial of their legitimate export benefits was a violation of their fundamental rights under Article 14 of the Constitution. The High Court noted that the Customs authorities' refusal to pay the drawback based on a hyper-technical reason was wholly unreasonable. The Court emphasized that the petitioners had declared their exports under the drawback scheme in the shipping bills, and the subsequent orders determining the admissibility of the drawback claims were based on verified documents. Therefore, the Customs authorities were obligated to release the drawback without insisting on the amendment of the shipping bills.

Judgment:
The High Court found that the respondents' actions were unjustified and directed them to process the petitioners' drawback claims based on the previous orders without any further delay. The Court ruled that the insistence on rectifying the scheme code entry was unnecessary and that the Customs authorities should have acted in accordance with the law to avoid compelling the petitioners to seek judicial intervention. The petition was allowed, and the respondents were instructed to process the drawback claims within two weeks from the date of the writ order. The Court made the rule absolute to the extent of granting the petitioners' relief and did not award any costs.