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TMI Blog2013 (3) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... ilament yarn. Under the Drawback Rules framed by the Government in exercise of powers under Section 75 of the Customs Act, 1962 (hereinafter referred to as "the Act") and Section 37 of the Central Excise Act, 1944, the Central Government is given power to fix rates at which drawback would be allowed to exporters of specified goods. The Schedule to the Drawback Rules provides for classification of goods specified for allowing drawback. Sub-Serial No. 54.04 of the Drawback Schedule covered goods of the description "all fabrics including sarees, dhotis and odhanies made of man-made staple fibers and filament yarn". The goods exported are covered under Sub-Serial No. 5404 of the Drawback Schedule and as such the petitioners in each of the petitions were eligible for drawback thereunder. Initially, under the Drawback Schedule in respect of goods falling under Sub-Serial No. 5404, drawback was payable at the rate of 20% of FOB value subject to maximum of Rs. 62 per kg of filament yarn content. The said Schedule was published vide Public Notice dated 15-6-1995 which contained conditions (a) and (b). Subsequently, with effect from 1st August 1995, clause (c) came to be added in column 3 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pears that there was some confusion prevailing as regards the applicability of condition (c), namely, as to whether the maximum ceiling of Rs. 62 per kg of filament yarn content was applicable to the goods falling under condition (c) to the Schedule. It appears that the authorities at the relevant time had interpreted the Schedule to mean that insofar as the goods falling under condition (c) are concerned, no maximum ceiling had been imposed. Accordingly, the petitioners had been paid drawback at the rate of 17% without any maximum ceiling. 4. Subsequently, by a letter dated 20th September 1996, the Commissioner (Drawback) clarified that the rate mentioned against heading S.S. No. 5404 (1)(i) would read as "17% (seventeen percent only) of the FOB value subject to a maximum of Rs. 62 (Rupees sixty two only) per kg. of filament yarn content". It was further clarified that pending drawback claims may be finalised in the light of such clarification. It may be noted that the said letter which was circulated to all Chief Commissioners of Customs/Commissioners of Central Excise/and Commissioner of Customs (Preventive) was issued with the approval of the Chairman, C.B.E & C. Subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of show cause notice for recovery of excess drawback paid by the Department under Rule 16 of the Customs and Central Excise Duty Drawback Rules, 1995 (hereinafter referred to as "the Drawback Rules"). Accordingly, the differential amount of drawback in excess of Rs. 62/- erroneously paid to the petitioners came to be confirmed. 6. Each of the petitioners carried the matter in appeal before the Commissioner (Appeals), who by a common order dated 29-6-2000, allowed the appeals. On merits the Commissioner (Appeals) held in favour of the petitioners by holding that in case of export already made, as in the present appeal, there was no intention on the part of the Government to apply the maximum ceiling limit. On the question of limitation, it was held that the show cause notice had been issued after two to three years of sanctioning of drawback claims of the petitioners, without alleging suppression of facts, fraud or willful misstatement and therefore, the show cause notices are time barred. That though there is no time limit fixed under Rule 16 of the Drawback Rules, a reasonable period of six months would apply as per Section 28 of the Customs Act, 1962. While holding so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal authority had laid emphasis on the limitation aspects of the matter while deciding the revision application. 9. Pursuant to the aforesaid order the petitioner filed review applications before the revisional authority, who by an order dated 31-12-2003 rejected the review applications, giving rise to the present petitions wherein both the order dated 28-6-2002 as well as the order dated 31-12-2003 passed by the revisional authority are subject matter of challenge. 10. On 19th April 2004, this Court while issuing rule had, inter alia, observed thus : "5. While we do find some substance in the submission of the learned Senior Standing Counsel on merits of the controversy that the cap of Rs. 62 per kg. on filament yarn content was applicable to all the notes under entry 5404(1)(i), in the present group of petitions, we are only concerned with the question whether the power under Rule 16 of the Duty Drawback Rules, 1995 was required to be exercised within reasonable time." 11. Thus, by virtue of the aforesaid order, this court had limited the scope of the petition to the question as to whether the power under Rule 16 of the Drawback Rules was required to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the initial clarification dated 20-9-1996 came to be issued till the subsequent clarification came to be issued by the C.B.E & C. by a letter dated 19-8-1999 to the effect that the clarification dated 20-9-1996 would be operative from the date of issuance of the original notification, the respondent authorities had accepted that the clarification would apply to pending drawback cases only. Now, after a delay of more than three years since the drawback came to be paid to the petitioners by the show cause notices issued in February, 2000, the drawback is sought to be recovered from the petitioners. 14. It was emphatically argued that the show cause notices issued under Rule 16 of the Drawback Rules were clearly time barred inasmuch as the same have been issued after a period of more than three years from the date when the drawback came to be paid to the petitioners. The correspondence exchanged between the Revenue Officers inter-se shows that the officers were put to notice about the interpretation of the Drawback Schedule in September 1996 itself and yet the notices were issued only in the year 2000. It was submitted that though Rule 16 of the Drawback Rules does not provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove review applications before the Government of India. It was submitted that in review, the sole ground raised by the petitioners was on the merits of the case, namely, that the maximum ceiling of Rs. 62 per kg of filament yarn content would not be applicable to condition (c) of the Note under SS No. 5404(1)(i) of the Schedule. However, no contention had been raised on the question of limitation. According to the learned counsel, the order passed by the Commissioner (Appeals), allowing the appeals of the petitioners stood merged with the earlier order dated 28th June 2002 passed by the revisional authority which in turn stood merged with the order dated 31st December 2003 passed on the Review Application. It was submitted that under the circumstances, it would be only the last order which would be in existence inasmuch as the earlier orders stood merged in the subsequent order. It was submitted that since in the ultimate order passed by the revisional authority, no ground as regards the bar of limitation has been urged, it is not permissible for the petitioners to contend that the demand of drawback is barred by limitation. In support of his submissions, the learned counsel placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was not only prospective. It appears that it is only pursuant to the subsequent letter dated 19th August 1999, that the show cause notices have been issued in February 2000. Thus, though the Customs Authorities were well aware about the clarification in respect of the drawback paid on goods falling under condition (c) of the Note below sub-serial No. 5404(1) of the Schedule, no action was taken at the relevant time to recover the drawback paid to the petitioner beyond the ceiling limit provided thereunder. It is only in February 2000, after a period of more than three years that by issuance of show cause notices, differential amount of drawback was sought to be recovered from the petitioners. The revisional authority in the earlier order dated 28th June, 2002 has held that the Drawback Rules do not provide for any time limit and as such there is no time limit for issue of demand notice for recovery of drawback paid erroneously or in excess under Rule 16 of the Rules. 18. Rule 16 of the Drawback Rules provides that where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case." 20. In Collector of Central Excise, Jaipur v. M/s. Raghuvar (India) Ltd. (supra), the Supreme Court held that any law or stipulation prescribing a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights and, therefore, must be specifically enacted and prescribed therefor. It is not for the courts to import any specific period of limitation by implication, where there is really none, though courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period. 21. In Torrent Laboratories Pvt. Ltd. v. Union of India (supra), a Division Bench of this Court in the context of Rule 57-I of the Central Excise Rules, 1944 held that in absence of any provision with regard to specific period of limitation, reasonable period of limitation has to be read into the rule. 22. Thus, it is a settled legal proposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rganics Pvt. Ltd. v. Commissioner of Customs (supra) on which reliance has been placed by the learned counsel for the respondents is concerned, a perusal of the said decision indicates that the said case fell within the ambit of willful misstatement or suppression of fact as envisaged under the proviso to Section 28 of the Customs Act. It is, therefore, in the light of the peculiar facts of the said case that the court had held that the contention that the extended period of limitation could not be invoked was misconceived. The decision cannot be said to be laying down any absolute proposition of law to the effect that since Rule 16 of the Drawback Rules does not provide for any limitation for recovery of amount of drawback erroneously paid, such powers can be exercised at any point of time, even beyond a reasonable period. 25. As regards the submission advanced by the learned counsel for the respondent that since in the review application, the petitioners had not raised the contention as regards limitation, the petitioners are now prohibited from raising the same in these petitions, it may be noted that in the earlier order dated 28th June 2002, passed by the Government of I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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