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2019 (10) TMI 804 - HC - CustomsRecovery of Duty Drawback - Petitioners has raised three issues namely (i) Effect of repeal of duty drawback rules 1995 w.e.f. 01.10.2017 (ii) Absence of mechanism to raise demand of duty drawback and (iii) Power of Respondent to reassess value of goods already exported. - rejection of declared Free on Board (FOB) value of the goods already exported - demand of drawback disbursed post export of goods - recovery of Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - HELD THAT - In the present writ petitions, concededly identical questions as raised in M/S FAMINA KNIT FABS THROUGH ITS PARTNER VERSUS UNION OF INDIA AND ORS. 2019 (9) TMI 970 - PUNJAB AND HARYANA HIGH COURT and M/S JAIRATH INTERNATIONAL AND ANR. AND RAJESH DHANDA VERSUS UNION OF INDIA AND ORS. 2019 (10) TMI 642 - PUNJAB AND HARYANA HIGH COURT are raised - In both judgments, we have held that inspite of availability of alternative remedy available under 1962 Act, writ petition is maintainable in view of involvement of pure questions of law as well jurisdiction and law enunciated by Hon ble Supreme Court and followed by this court time and again. While taking cue from Sections 28, 28AAA 75 of 1962 Act and relying upon judgment of Hon ble Supreme Court in the case of Commissioner of Central Excise versus Larsen and Toubro 2015 (8) TMI 749 - SUPREME COURT as well this court in the case of Laqshya Media Pvt. Ltd. Vs State of Punjab and Others 2016 (8) TMI 1460 - PUNJAB AND HARYANA HIGH COURT , we have held that mechanism is absent in Duty Drawback Rules, 1995 thus demand under Rule 16 of Drawback Rules, 1995 is not sustainable. Petition allowed.
Issues:
1. Quashing of show cause notice rejecting FOB value of exported goods and demanding drawback. 2. Effect of repeal of Duty Drawback Rules 1995. 3. Absence of mechanism to raise demand of duty drawback. 4. Power of Respondent to reassess value of goods already exported. Analysis: Issue 1: Quashing of show cause notice rejecting FOB value of exported goods and demanding drawback The petitioners sought the quashing of a show cause notice dated 31.7.2014, which proposed to reject the declared Free on Board (FOB) value of goods already exported and demanded drawback disbursed post-export under Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. The Directorate of Revenue Intelligence (DRI) alleged that the petitioners fraudulently availed duty drawback by overvaluing the exported goods. The Joint Commissioner of Customs issued the impugned notice calling for the rejection of the FOB value and the recovery of duty drawback. The High Court, after considering the arguments and previous judgments, found that the issues raised were similar to previous cases and ruled in favor of the petitioners, quashing the show cause notice. Issue 2: Effect of repeal of Duty Drawback Rules 1995 The counsel for the petitioners raised concerns regarding the effect of the repeal of Duty Drawback Rules 1995 with effect from 01.10.2017. The High Court referred to Rule 20(2) of the Drawback Rules 2017, which saved certain rights/actions accrued under the 1995 Rules. The court held that a show cause notice issued after 1.10.2017 invoking Rule 16 of the Drawback Rules 1995 was not sustainable. This decision was based on legal precedents and the interpretation of relevant sections of the Customs Act, 1962. Issue 3: Absence of mechanism to raise demand of duty drawback Another issue raised was the absence of a mechanism in the Duty Drawback Rules 1995 to raise a demand for duty drawback. The High Court, drawing from Sections 28, 28AAA, and 75 of the Customs Act, and previous judgments, held that the demand under Rule 16 of the Drawback Rules 1995 was not sustainable due to the lack of a proper mechanism. The court's decision was supported by legal principles and established case law. Issue 4: Power of Respondent to reassess value of goods already exported The question of whether the Respondent had the power to reassess the value of goods already exported was also considered. While initially leaving this question open in a previous case, the High Court, in light of recent Supreme Court rulings, determined that the Respondent did not have the authority to reassess the value of goods once they had been exported. This decision was based on legal interpretations and the application of relevant legal principles. In conclusion, the High Court allowed the writ petition, quashing the show cause notice dated 31.7.2014 against the petitioners based on the detailed analysis of the issues raised and the legal precedents cited during the proceedings.
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