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TMI Blog2017 (5) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... not satisfied, the claim for drawback has to be returned to the claimant together with the deficiency memo and such claim shall be deemed to not having been filed for the purpose of section 75A of the Act, viz., for the purpose of payment of interest. Once the claim for drawback is returned with the deficiency memo, it can only be considered after it is submitted after removal of the deficiency. The deficiency memo is, therefore, not in the nature of a show cause notice, but is in the nature of an information to the party stating the deficiency in the claim for drawback and calling upon it to remove such deficiency and thereafter, submit the claim. In the facts of the present case, on a reading of the contents of the deficiency memo, it is evident that the same does not relate to either of the two eventualities mentioned in sub-rule (3) of rule 13 of the rules - The deficiency memo has been issued on the ground that the Department does not agree to the classification and selfassessment of the exported goods made by the petitioner - From the very nature of the deficiency memo, it is evident that the question of raising a dispute with regard to classification and self-assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the export transaction has been completed, that is, the goods have also been received by the importer. It is further the case of the petitioner that the goods have been cleared by issuing Let Export Order under section 51 of the Act after the Proper Officer has assessed the goods under different chapter headings on which the goods have been classified and the classification made by the petitioner has been accepted by the Proper Officer and the goods have been cleared after an appropriate order under section 51 of the Act has been passed. Moreover, even an export promotion copy has been issued by the customs authorities, which according to the petitioner is the final and conclusive proof to show that the assessment under section 17 of the Act has been undertaken and the Let Export Order has been issued under section 51 by the Proper Officer. According to the petitioner, it is only on production of export promotion copy that the exporter would be entitled to the benefits of incentives of export, such as, duty drawback and such other incentives, such as, Focus Product Scheme (FPS), which is under the Foreign Trade Policy of the Union of India. 3. The petitioner submitted claims fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and repair or building and other structure and more appropriately classifiable under Chapter 73084000, and calling upon the petitioner to show cause as to why the exported goods referred to therein should not be classified under CTH and sub-heading thereof and drawback be restricted accordingly, which has given rise to the present petition. 4. During the pendency of the present petition, the third respondent, Deputy Commissioner has unilaterally changed the classification and has released the drawback on 23.02.2016 calculating the drawback as per Chapter Heading 7308. Moreover, what has been released is only the principal amount of drawback and not the interest thereon as payable under section 75A of the Customs Act. It appears that out of 27 shipping bills, deficiency memo has been issued in respect of 22 bills only, however, drawback has been withheld in respect of the remaining 5 bills. 5. In response to the averments made in the petition, an affidavit-in-reply has been filed on behalf of the respondents No.2 and 3 stating that the petitioner had filed drawback claim on the basis of shipping bills declaring export goods as threaded bar, bar clamp, clamp, base square was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the DRI, deficiency memos have been issued by the respondents requiring them to explain as to why exported goods as referred to in the deficiency memos should not be classified under CTH 7308 and sub-heading thereof and drawback be restricted accordingly. It is further averred that the petitioner was expected to submit its response to the impugned deficiency memo within a period of 30 days from the date of receipt of the said memo; however, the petitioner failed to do so even after the expiry of the time allowed in the memo. Under the circumstances, the answering respondents considered it proper to sanction drawback claim to the extent allowable to the petitioner and on 08.02.2016, sanctioned drawback for an amount of ₹ 6,36,108.84, whereas for the remaining claim, it was considered proper to issue show cause notice and decide the same after following due process of law, including that of giving opportunity of hearing to the petitioner. It is also clarified that hearing was not given to the petitioner for sanctioning the part of the drawback claim in favour of the petitioner, whereas the petitioner will be given hearing before rejecting part of the drawback claim s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, the drawback came to be released by the Department, however, without interest, by accepting the classification of the goods made by the petitioner. It was submitted that therefore, in respect of similar type of goods in respect of which similar queries were made, the Department has accepted the classification made by the petitioner and has released the drawback, however, with regard to the other export transactions, the drawback claims have not been processed and are not released. 6.1. It was submitted that the impugned deficiency memo has been issued with a view to make a show that some inquiry has been initiated with regard to the drawback claims and can, therefore, be taken as a reason to further withhold the drawback claims. It was contended that once final assessment is made and classification of goods has already been made and approved by the proper officer, no officer can reopen such assessment, except as provided under law. The attention of the court was invited to sub-rule (3) of rule 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (hereinafter referred to as the rules ), which provides that if the drawback claim is incomplete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried out by the DRI, that the impugned deficiency memo has been issued calling upon the petitioner to explain with regard to the classification of the goods exported by it. It was further submitted that insofar as the limitation of 10 days for issuance of deficiency memo as contained in sub-rule (3) of rule 13 of the rules is concerned, the same is merely directory and not mandatory. It was submitted that the deficiency memo has been correctly issued to the petitioner to clarify its classification of exported goods and that the petition being devoid of merit, deserves to be dismissed. 8. In the light of the facts and submissions noted hereinabove, it may be germane to refer to rule 13 of the rules, which bears the heading Manner and time for claiming drawback on goods exported other than by post . Sub-rule (1) thereof provides that triplicate copy of the Shipping Bill for export of goods under a claim for drawback shall be deemed to be a claim for drawback filed on the date on which the proper officer of customs makes an order permitting clearance and loading of goods for exportation under section 51 and said claim for drawback shall be retained by the proper officer making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of an information to the party stating the deficiency in the claim for drawback and calling upon it to remove such deficiency and thereafter, submit the claim. 12. In the facts of the present case, on a reading of the contents of the deficiency memo, it is evident that the same does not relate to either of the two eventualities mentioned in sub-rule (3) of rule 13 of the rules, viz., that the claim is incomplete in any material particulars or any of the documents specified in sub-rule (2) of rule 13 are not furnished. The deficiency memo has been issued on the ground that the Department does not agree to the classification and selfassessment of the exported goods made by the petitioner. From the very nature of the deficiency memo, it is evident that the question of raising a dispute with regard to classification and self-assessment would not arise, inasmuch as, a deficiency memo can only be issued pointing out the deficiencies specified in sub-rule (3) of rule 13 of the rules. Evidently therefore, the deficiency memo travels much beyond the scope of sub-rule (3) of rule 13 of the rules. 13. Another notable aspect of the matter is that a perusal of the affidavit-in-reply fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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