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TMI Blog2015 (9) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents M/s. Cummins India Ltd. are the manufacturer of IC Engines and parts thereof falling under Tariff Item No. 8408. From May, 2005 to February, 2010, they exported these products and claimed drawback against the brand rate letters issued under Rule 6(1)(a) of the Drawback Rules, 1995. 2.1 Subsequently, it was noticed that impugned exported goods had been notified under list of All Industry Rate (AIR) for Drawback under Rule 3 of the Drawback Rules vide Notification No. 36/2005-Cus., dated 2-5-2005 w.e.f. 5-5-2005. Rather, M/s. Cummins India Ltd. filed for determination of drawback rates under Rule 6(1)(a) resort to which is envisaged only where no amount or rate of drawback has been determined in respect of any goods in terms of Rule 3 ibid, by making wrong declarations. Therefore, the Department issued three show cause notices, dated 4-10-2010, 25-11-2010 and 3-12-2010 under Rule 16 ibid for demand and recovery of excess drawback sanctioned. These show cause notices were adjudicated by a common Order-in-Original dated 21-3-2011, passed by the Commissioner of Customs, Pune. Aggrieved by the Order-in-Original, the respondent filed an appeal before CESTAT, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in accordance with the law and also to decide whether the order passed by the Commissioner (Appeals) specifically referring to Rule 17 is legal and proper or not. 4. The applicant department had filed the aforesaid Revision Application under Section 129DD of Customs Act, 1962 before Central Government on the following grounds : 4.1 The exporters have received drawback at the rate under Rule 6 as per brand rate letters issued by the jurisdictional Central Excise Commissionerate from time to time. No supplementary claim was ever filed by them before adjudication order was passed on 21-3-2011 for Shipping Bills pertaining to the year 2005, 2006 and 2007, etc. It was only after the order was passed by the Commissioner that the exporters suddenly realized that the amount received by them through Brand rate letters is less than the All Industry Rate; this prompted them to file supplementary drawback claim in March, 2011. This shows that the supplementary claims have not been filed within the time limit stipulated by the Drawback Rules and so rightly rejected. 4.2 In the letter dated 1-6-2011 issued by Assistant Commissioner, Customs, Dighi, rejecting the supplement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary claims in the year 2011 was beyond the scope of any relaxation in the time limit stipulated for submission of supplementary claim. Further Rule 17 empowers only the Central Government to grant any relaxation/condonation to the exporter. In view of the above facts of the case, it will be incorrect to hold the date of the Order-in-Original i.e. 21-3-2011 as the relevant date for filing supplementary claims or within three months of that date as claimed by the exporters. Therefore, the Order-in-Appeal No. GOA/CUS/GSK/57/2011, dated 9-11-2011 passed by the Commissioner (Appeals) to the effect that the supplementary claims filed by the exporters be admitted and processed, appears to be not just, proper and hence, the same may be set aside by the Central Government. The period of limitation for filing the supplementary claim be reckoned as being three months from the date of payment or settlement of the original claims of drawback by the proper officer under proviso (iii) to Rule 15(1) of the Drawback Rules, 1995. 5. Show cause notice was issued to the respondent under Section 129DD of Customs Act, 1962 to file their counter reply. The respondent vide their letter dated 18-5-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29-10-1998 issued by the Board. Therefore, in the present case also, the respondents have filed the supplementary claim well within 90 days from the order dated 21-3-2011 passed by the Commissioner of Customs holding that the respondents are entitled for drawback only under Rule 3, i.e. All Industry Rate of Drawback. Hence, the application filed by the respondents cannot be treated as time-barred. 5.4 The order dated 21-3-2011 passed by the Commissioner, in fact, categorically holds that the respondents are entitled to drawback in terms of Rule 3 alone. That being so, in respect of all exports made by the respondents during the period, there is a determination of drawback by the Commissioner vide order dated 21-3-2011. It is a different matter that in respect of the exports covered by the supplementary claim no recovery is proposed since in respect of those exports covered by the supplementary claim, the drawback sanctioned was lower than the drawback available under Rule 3. Hence, Supplementary claim dated 22-3-2011 is not time-barred. Department is travelling beyond scope of order dated 1-6-2011 and is not following object of the Drawback schemes. 6. In compliance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority. The contention of the petitioner is that the department had taken into account for the purpose of computation and working of alleged excess payment of drawback, only those shipping bills wherein the drawback sanctioned to the petitioner under Rule 6 was more than the drawback allowable under Rule 3 (All Industry Rate of Drawback). According to them, drawback sanctioned to them in respect of certain shipping bills under Rule 6 was less than the drawback allowable to them under Rule 3 on the FOB value mentioned in the respective shipping bills and the supplementary drawback claims were filed. The Assistant Commissioner, Customs, Dighi rejected the claim vide letter dated 1-6-2011 on the ground that the supplementary claim is time-barred. Aggrieved by this order appeal was filed before the Commissioner (Appeals) and the same was allowed on 9-11-2011. Aggrieved by the same, department filed RA before Joint Secretary. The Revisionary Authority set aside the order of the Commissioner (Appeals) and allowed the Revision Application. Aggrieved by the same M/s. Cummins India filed the W.P. in Hon'ble High Court, Bombay. The Hon'ble High Court vide order dated 15-12-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claims within three months from the original order of settlement of drawback claims with request to condone the delay. 6.2.4 In fact the petitioner has filed the claim with an intention that the claim is within the time limit. They have not come forward with application for condonation of delay. There should be sufficient ground to condone the delay. When the petitioner was having knowledge that they have received less drawback, then they should have come forward with the supplementary claim within the time prescribed with specific grounds. However, the grounds put forth by the petitioner are not sufficient and therefore there is no question of condonation of delay and the power to relax under Rule 17 cannot be exercised. Now the matter to be reconsidered by the Revisionary Authority is to whether the power to relax under Rule 17 has been invoked and if invoked before him, could the power be exercised at the stage at which the matter is brought before him. 6.2.5 It is the contention of the department that the petitioner have not brought any evidence in support of his application for condonation of delay. Rule 17 should have been invoked at the time of filing the supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon Order No. 31/2010-11, dated 21-3-2011, passed by the Commissioner of Customs, Pune wherein recovery of excess paid drawback has been confirmed and penalty imposed on the respondent-company. This order was set aside by the CESTAT vide order dated 12-4-2012 and remanded back to the adjudicating authority for reconsidering the claim for sanction of drawback under Rule 7 ibid. Subsequent to Order No. 31/2010-11, dated 21-3-2011, the respondent filed supplementary claim of drawback on 22-3-2011 on the ground that by virtue of the said order, they have received lesser amount of drawback under fixation of brand rate of drawback under Rule 6 as against eligibility of drawback under All Industry Rate under Rule 3. These supplementary claims were rejected as time-barred by the original authority. Upon appeal by the respondent, Commissioner (Appeals) decided the cases in favour of the respondent. Aggrieved by the same, department filed Revision Application No. 380/04/DBK.12-RA before Joint Secretary (RA) on grounds stated in Para 4. The Revisionary Authority decided the said Application vide Revision Order No. 441/12-Cus. and allowed the department's Revision Application. Aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from filing his supplementary claim within the aforesaid period of three months. (2) Save as otherwise provided in this rule, no supplementary claim for drawback shall be entertained. (3) The date of filing of the supplementary claim for the purpose of Section 75A shall be the date of affixing the dated receipt stamp on such claims which are complete in all respects and for which an acknowledgement shall be issued in the form prescribed by the Commissioner of Customs. (4) (a) Claims which are not complete in all respects or are not accompanied by the required documents shall be returned to the claimant with a deficiency memo in the form prescribed by the Commissioner of Customs within fifteen days of submission and shall be deemed not to have been filed. (b) Where the exporter resubmits the supplementary claim after complying with the requirements specified in the deficiency memo, the same will be treated as a claim filed under sub-rule (1) for the purpose of Section 75A." 11. It is fact on record that the relevant date for determination of the period of limitation in the present case would be arrived at in terms of proviso (iii) to Rule 15(1) ib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had made an application for Brand Rate of Drawback under Rule 6." This shows that the respondent was always aware that All Industry Rate was available for their product. Hence, they cannot now assert that their claim was settled only by the proceedings which concluded on 21-3-2011. It was incumbent upon the respondent to correctly and carefully claim and avail the benefit of drawback in terms of the provisions applicable and within the prescribed time-limit. 14. Government further observes that just as there are specific statutory provisions for recovery of erroneous drawback by the Government under Rule 16, there are also specific provisions for claim by the exporter of lesser amount of drawback received under Rule 15 ibid. 14.1 Rule 16 ibid provides for repayment of erroneous or excess payment of drawback. Thus for those shipping bills where the respondent was paid excess drawback, demand notices were issued and confirmed vide Order-in-Original No. 31/2010-11, dated 21-3-2011 seeking repayment of excess amount of drawback paid. 14.2 Rule 15 ibid on the other hand enables the exporter to file supplementary claims in three specified circumstances where the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve conceded that their case may not fall strictly in Rule 15 but the time limit could have been relaxed by the Government in alternative and without prejudice under Rule 17. 18. In light of the factual position as above, Government now proceeds to examine the second issue at (b) in Para 9 above regarding the applicability of Rule 17 ibid in the present case. 19. Government notes that the Rule 17 ibid reads as under : "Power to relax. - If the Central Government is satisfied that in relation to the export of any goods, the exporter or his authorised agent has, for reasons beyond his control, failed to comply with any of the provisions of these rules, and has thus been entitled to drawback, it may, after considering the representation, if any, made by such exporter or agent, and for reasons to be recorded in writing, exempt such exporter or agent from the provisions of such rule and allow drawback in respect of such goods." The above Rule spells out the power of the Central Government to relax the provisions contained in the Drawback Rules for reasons beyond the control of any exporter and allow drawback, subject to the requirements stipulated therein. 20. Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall be accompanied by a fee of - (a) two hundred rupees, where the amount of duty and interest demanded, fine or penalty levied by an officer of customs in the case to which the application relates is one lakh rupees or less; (b) one thousand rupees, where the amount of duty and interest demanded, fine or penalty levied by an officer of customs in the case to which the application relates is more than one lakh rupees : Provided that no such fee shall be payable in the case of an application referred to in sub-section (1A). (4) The Central Government may, of its own motion, annul or modify any order referred to in sub-section (1). (5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value shall be passed under this section, - (a) in any case in which an order passed under section 128A has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition, filed by the petitioner in this Court, being Writ Petition No. 398 of 2006. Earlier petition bearing Writ Petition No. 398 of 2006 [2007 (211) E.L.T. 366 (Bom.)] was disposed of at the stage of admission by an order of the Division Bench of this Court dated 6-11-2006. Subject matter of the said petition pertained to the rejection of an application for fixation of Brand Rate of duty drawback under Rule 6(1)(a) of the Customs and Central Excise Duties Drawback Rules, 1995. It was the contention of the Petitioner that in the earlier petition, Respondent No. 2 i.e. Joint Secretary (Drawback), the Directorate of Drawback, Ministry of Finance was the competent authority vested with the powers to condone delay in filing of such an application and in spite of such application being made to him, the Respondent No. 4 had wrongly passed the impugned order dated 12-2-2007. It appears that at the stage of hearing for admission, Central Government Standing Counsel appearing for Respondents No. 1, 3, 4 and 5 in the said petition had submitted that if this Court so directed, the competent authority would hear the petitioner's application afresh for condonation of delay and pass appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government's power to relax, under Rule 17 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the period of delay in submitting the Brand Rate Application. Such an Application for relaxation under Rule 17 should be submitted by the Appellants to the Central Government through the Joint Secretary, Drawback in the Ministry". 24.3 Further, the Revisionary Authority while holding supplementary drawback claim filed after 17 months from date of settling of claim as hit by limitation in the case of Steel Authority of India - 2014 (311) E.L.T. 1016 (G.O.I.) had held as under : "The respondent has finally argued that Central Government may condone the delay in terms of Rule 17 of Drawback Rules. In this regard, Government observes that respondent was required to seek such condonation of delay from designated proper authority in Central Government. Respondent has not produced any such condonation of delay approval from competent designated authority and therefore no relief can be granted by revisionary authority who is exercising powers only under Section 129DD of Customs Act, 1962". 24.4 The above case laws thus also establish that the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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