2023 (2) TMI 383 - HC - Customs

Adjustment of pending drawback claims towards the demand - seeking to consider the appeal on merits without insisting pre-deposit required under Section 129E of the Customs Act 1962 - refund of Duty Drawback alongwith the interest - HELD THAT - This Court is of the view that the petitioner s grievance may be allayed if directions are issued to the respondent to forthwith release the duty drawback in respect of the five Shipping Bills (out of nine shipping bills that were uploaded by the petitioner on 28.07.2015). The petitioner would thereafter be at liberty to utilise the funds received for complying with its obligation to make a pre-deposit to maintain an appeal before the CESTAT. This Court also considers it apposite to direct CESTAT not to reject the petitioner s appeal (diary no. 52123/2021) for want of pre-deposit for a period of four weeks from today - Insofar as the petitioner s claim for other remaining duty drawback is concerned (the duty drawback in respect of other Shipping Bills) the petitioner is at liberty to avail of its alternate remedy for release of the said amount. Petition disposed off.

Summary

Issues:
Adjustment of pending drawback claims against confirmed demand, consideration of appeal without pre-deposit, refund of duty drawback amount.

Adjustment of Pending Drawback Claims:
The petitioner, engaged in exporting readymade garments, claimed duty drawback for exports under 211 Shipping Bills. Despite the duty drawback being sanctioned, it was not disbursed. Following search operations and investigations, an order was passed dropping proceedings for confiscation of goods but directing the recovery of ineligible Focus Market Scrips and imposing a penalty. The petitioner sought the release of duty drawback, which was due for nine Shipping Bills, to adjust against the pre-deposit required for an appeal. The respondent argued against adjusting duty drawback for pre-deposit, stating no provision under the Customs Act allows it. The Court agreed, noting the difference in nature between duty drawback and pre-deposit, but directed the immediate release of duty drawback for five Shipping Bills to help the petitioner comply with the pre-deposit requirement.

Consideration of Appeal Without Pre-Deposit:
The petitioner filed an appeal against the order but it was not entertained due to the lack of pre-deposit. The respondent contended that duty drawback could not be released for four Shipping Bills without foreign exchange remittance. The Court acknowledged this but directed the release of duty drawback for the remaining five Shipping Bills to help the petitioner meet the pre-deposit obligation. It also instructed the appellate tribunal not to reject the appeal for want of pre-deposit for four weeks.

Refund of Duty Drawback Amount:
The Court disposed of the petition by directing the immediate release of duty drawback for five Shipping Bills to assist the petitioner in fulfilling the pre-deposit requirement. It allowed the petitioner to pursue an alternate remedy for the remaining duty drawback claims. The judgment aimed to address the petitioner's concerns by balancing the release of duty drawback with the obligation to make a pre-deposit for the appeal, ensuring a fair resolution for both parties.