9911796707
TMI Blog2021 (12) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... and tools, etc. falling under Chapter Heading 7318, 8205, 3926, 3923 of the Customs Tariff Act, 1975. It is averred that the petitioners are exporting goods to the Gulf and Upper Gulf Countries after being registered with the office of the Director General Foreign Trade, Ludhiana. 2.2. The procedure which is conducted for the export under the Customs Act, 1961 (hereinafter referred to as "the Act") is to file shipping bills under Section 15 of the Act which would be assessed by the proper officer under Section 17 of the Act and value and classification of the goods under drawback schedule in case of drawback shipping bills are checked once the goods are received in the docks/warehouse. The Customs Broker (CB) will present to the customs office checklist with endorsement of custodian and other declaration along with original documents. The goods will be examined as per the norms of examination as specified by the authority. For the exports under the duty drawback and export consignment to sensitive ports like Dubai, Sharjah, Singapore, Hong Kong etc. 25-50% of the consignment will be examined and if the same is found in order, the export order will be issued by the Docks Appraiser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and implementation of the notice at Annexure A to the petition; (e)Pending the admission and final disposal of the petition, this Honourable Court be pleased to stay the execution and implementation of the order in original at Annexure B to this petition; (f)This Hon'ble Court be pleased to grant an ad-interim relief in terms of para (d) and para(e); (g) To pass such other and further orders as are necessary in the interest of justice." 3. On issuance of notice respondent No.2 appeared and filed affidavit-in-reply. The Deputy Commissioner (SIIB), Customs House, Mundra has denied all averments unless specifically admitted. 3.1. According to the respondent No.2,the SCN is issued by the Additional Commissioner of Customs, Customs Commissionerate, Mundra as the impugned goods were exported from the Mundra Port vide various shipping bills filed with Mundra Customs House, therefore, it comes under the jurisdiction of the office of the Principal Commissioner of Customs, Mundra and hence, the SCN is issued by the Additional Commissioner of Custom who is the proper officer as per the monetary limit fixed by Central Board of Indirect Taxes and Customs, since the cause of action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, deserved to be handled strictly. 3.6 It is also the say of the respondent that the decision of NEW PENSLA INDUSTRIES VS. COMMISSIONER OF CUSTOMS relied upon by the petitioners would not apply in the instant case, where the issue is related to the query raised by the drawback section regarding classification after partially sanctioning the drawback. The High Court rejected the department's query and allowed the drawback however, in this case, the issue is completely different. According to the respondents, the shipping bills of the exporters are self-assessed. In the past exports, the goods have been wrongly classified under CTH 8205 7000, 7325 9910, 7318 1900 and after the DRI booked the case, the exporters started mentioning the classification under CTH 7308 4000 which was upheld by the adjudicating authority. In the past shipping bills of the exporters, the drawback under CTH 8205 7000, 7325 9910, 7318 1900 are more than the drawback under CTH 7308 4000 and that is the reason why the exporters have resorted to misclassification. After DRI investigation, it changed to CTH 7308 4000 on its own and that will not help the cause of the petitioners. 3.7 The Commissioner's (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accept the assessment or would not. There are valuation rules for assessing the goods which are under valued and once finally assessed, the goods are ready for export. The SCN had been issued on the ground of under valuation after a lapse of long time, which is questioned by the petitioners that the same is impermissible when the goods are already exported. The exporter had already received the consideration for the exported goods as per the value declared before the Assessing Officer and that has to be treated as final and such valuation is not required to be disputed. 6.1 According to the petitioners, the value of the goods exported have been realised and the note from the Bank is also received by exporter. On the strength of the weight, the value has been calculated and according to the petitioners, once the value has attained the finality, it cannot be disputed. It is even not for the competent and proper officer while assessing the goods, which has attained finality, to once again revisit the same. 7. Taking firstly the aspect of jurisdiction as contended before this Court, the SCN has been issued on 09.02.2018 by the Additional Commissioner of Customs, Customs Commissionera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962." 7.5 It is quite clear from the said Rule that any amount of drawback and interest when paid erroneously or is paid in excess of the entitlement of the claimant, on demand by a proper officer of the Customs, the claimant is required to repay the amount paid erroneously or in excess. Rule 16 of the Drawback Rules provides for recovery of an amount of drawback and interest paid erroneously or in excess of what the claimant is entitled to, on demand by a proper officer of the customs the same shall need to be repaid. And, where he fails to repay the amount, it is permitted to be recovered in the manner provided under Sub-section (1) of Section 142 of the Act. It is quite clear from Rule 16 of the Drawback Rules that what all it provides for is the recovery of excess drawback paid erroneously, but choses not to prescribe the time limit. The question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead into rule 16 of the Drawback Rules which does not prescribed any period of limitation for recovery of drawback erroneously paid. 17.As noticed earlier, the drawback claims in all these petitions relate to the period between December 1995 to 1996, in relation to which, show cause notices came to be issued in February 2000. Thus, in all the cases, drawback claims had been processed and cleared before issuance of the clarification vide letter dated 20th September 1996 by the Commissioner (Drawback) with the approval of the Chairman of CBEC. On a close reading of the said letter, it is apparent that the same envisages finalization of pending drawback clai s in the light of the clarification issued therein, namely, that the maximum ceiling has to be inferred even in cases where goods are not exported under AR4 and/or exporter is unable to furnish the certificate as required under condition (b) of the Note to SS No.5404 (1) in respect of which drawback is payable at the rate of 17% of the FOB value. Thus, while issuing the initial clarification on 20th September 1996, the instructions issued by the CBEC were to the effect that the same should be applicable only to pending drawback ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmaceuticals, Madras (supra), the Supreme Court has, in the context of rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956, which did not provide for any period of limitation, held thus: "6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable period for recovery of the amount erroneously paid. As held by the Supreme Court in the case of Collector of Central Excise, Jaipur v. M/s.Raghuvar (India) Ltd. (supra), where no period of limitation is prescribed, the courts may always hold that any such exercise of powers which has the effect of disturbing the rights of citizen should be exercised within a reasonable period of time. In the present case, the drawback had been paid more than three years prior to the issuance of the show cause notices, and despite the fact that clarification in respect of condition (c) of the Note under SS No.5404(1)(i) of the Schedule had been issued way back in the year 1996, no efforts were made to recover the drawback paid to the petitioners at the relevant time. Thus, the petitioners were entitled to form a belief that the matter has attained finality and arrange their finances accordingly. Now, when after a period of more than three years has elapsed, if the respondents seek to recover the amount of drawback paid, it cannot be gainsaid that such exercise of powers would have the effect of disturbing their rights. Under the circumstances, reading in the concept of reasonable period in ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revisional authority had considered the aspect of limitation only, review applications came to be filed before the revisional authority inviting a decision on merits as regards the applicability of the maximum ceiling to the cases of the petitioners. Viewed in the aforesaid context, the contention that as the question of limitation had not been raised before the revisional authority in the review applications, the petitioners are debarred from raising such contention before this court in these petitions deserves to be stated only to be rejected. 26. In the light of the aforesaid discussion, in the opinionof this court, though rule 16 of the Drawback Rules does not provide for any period of limitation, a reasonable period has to be read into the said rule. As observed hereinabove, in the facts of the present case, the show cause notices which have been issued after a period of more than three years from the date when the drawback came to be paid to the petitioners, cannot by any stretch of imagination be said to have been issued within a reasonable period of time. Under the circumstances, the show cause notices have to be held to be bad on the ground of being time barred. Once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating authorities are hereby directed to sanction the respective refund claims of the claimant after following the law laid down by this Court in the case of NBM Industries (Supra) and pass fresh orders within a period of two months from the date of the receipt of the present order and to make the actual payment within a period of four weeks thereafter and also grant consequential reliefs which may be available to the petitioners under the relevant provision of the rules more particularly Rule 5 of the Rules. [6.1] Before parting with the present order, we are constrained to strongly disapprove such arbitrary act on the part of the lower adjudicating authority and/or lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Time and again the Hon'ble Supreme Court as well as various High Courts and this Court have disapproved such conduct/act on the part of the lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Still it appears that message has not reached the concerned authorities. In the recent decision in the case of Claris Lifesciences Ltd. (Supra) in para 26 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to in the present judgment and order, within a period of 30 days from the date of receipt of the present order so that such eventuality may not happen again and again." 10. In the instant case, the grievance on the part of the petitioners is that the Order-in-Original does not recognize the issue of limitation although the same being the settled law. Here the petitioners have exported the articles from Mundra Port and had claimed that drawback and benefit under the Focus Product Scheme (FPS). The allegation has been that it had indulged in misuse of drawback scheme and FPS and other exports incentives by way of making export of scaffolding items falling under CTH No.7308 by placing under CTH Nos.731816000, 39235010, 39269099 and 82057000 with the allegation of export of less quantity of goods than what was declared and over valuing of the export products. After the proper officer had allowed the export to be made, the DRI has initiated the action. 11. Admittedly, the export of goods covered under shipping Bill Nos.6982047 and 6982039 both dated 01.01.2015 and export goods covered under shipping Bill Nos.6998694 and 6997757 both dated 02.01.2015 had been seized carrying out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners have shown the procedure for export of goods. It is a detailed procedure to urge that the petitioners have exported the goods following the procedure upon the export permitted by the proper officer and the final shipping bills being generated, the petitioners were entitled to duty drawback as the shipping bills were filed through EDI system. Under the EDI system, once the final shipping bill is generated, the same becomes the final claim for the duty drawback according to the petitioner and the same needs to be paid within three working days as per the Circular No.25 of 2000 of the department. 15. We note that the show cause notice is issued by the authority for the shipping bills from the years 2011 to 2015. The list of shipping bills has been given & barring a very few shipping bills which have been submitted here duty drawback has been paid to the petitioner for numerous shipping bills from 2011 to 2014 long before and therefore, any show cause notice issued after a period of three years from the date when drawback came to be paid, cannot be sustained. This is also one serious breach deserving indulgence. In relation to most of the shipping bills, duty drawbacks have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the best, for those bills where payment of duty drawback is within 3 years of the issuance of SCN, the adjudication can be permitted. This has not been at all considered in the order in original. Again, with no challenge having been made by the department to the decision of the proper officer where many of the aspects of the petitioners have been accepted and with non consideration of the decision of this Court as discussed at length, interference would be necessary. 19. The initiation of the action on the part of the DRI on an intelligence of is severally questioned when the proper officer has already held in favour of the assessee classifying the item of export under a different head. Reliance is placed also upon the case of M/S.CANNON INDIA PRIVATE LIMITED V/S. COMMISSIONER OF CUSTOMS, reported in 2021 AIR 1699 to urge that the DRI has no powers to initiate action against the petitioner. This surely is an additional and potent ground for the Court to regard the binding decision of the Apex Court and hold in favour of the petitioner. 19.1 Even without touching the ratio laid down in case of M/s.Cannon India Private Limited (supra) as this decision came recently, on non consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
