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TMI Blog2025 (1) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case, the appellant had filed seven shipping bills on 24.02.2003 and the "let export order" was given on 13.03.2003. Under rule 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 that have been framed under section 75(2) of the Customs Act, the submission of the shipping bills is 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 - The amount of drawback should have been sanctioned within a period of one month from the date the "let export order" was issued on 13.03.2003 but it was actually sanctioned on 24.04.2022. Interest has been paid to the appellant by the Commissioner (Appeals) from a date after a period of one month from 31.05.2012 when the show cause notice was dropped by the adjudicating authority for the second time pursuant to the order passed by the Supreme Court and not from 13.03.2003 when the "let export order" was issued. It is on the instance of the department that proceedings were initiated and ultimately the claim of the appellant was found to be correct and the drawback was sanctioned. In such circumstances the issue that would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishan, Advocate for the Appellant Shri M.R. Dhaniya, Authorized Representative for the Department ORDER JUSTICE DILIP GUPTA: M/s Siddhachalam Exports Pvt. Ltd. the appellant has sought the quashing of the order dated 12.07.2022 passed by the Commissioner of Customs (Appeals) the Commissioner (Appeals), allowing the appeal in part by modifying the order dated 02.04.2022 passed by the Deputy Commissioner of Customs. The Deputy Commissioner of Customs had sanctioned drawback of Rs. 49,75,536/- in favour of the appellant, but the claim of the appellant for grant of interest was rejected. The Commissioner (Appeals), by the impugned order, has directed the adjudicating authority to calculate and sanction interest under section 75A of the Customs Act, 1962 the Customs Act for the period from 01.07.2012 till the date of payment of drawback. 2. This appeal has been filed by the appellant with a prayer that interest should be paid to the appellant from 14.04.2003 at the rate of 18% per annum. 3. It transpires from the records that the appellant had filed seven shipping bills, all dated 24.02.2003, on 24.02.2003 for export of goods declared as "Ladies Top" and "Denim Shirt" valued at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods, the claim of duty drawback could not have been deemed to be filed on date of LEO. In absence of firm value of exported goods, the duty drawback claim could not be considered to be a complete claim on the date of LEO. Thus the claim for interest from the date of LEO is clearly inadmissible and cannot be allowed. 5.5 Now the question arises as to what should be the date of claim of duty drawback. The Adjudicating Authority has held that the claim has become admissible consequent to the Hon'ble CESTAT order dated 07.10.2021 and its corrigendum dated 10.01.2022. I find this interpretation erroneous. The Hon'ble CESTAT has upheld the Order-in-Original dated 31.05.2012 and held that the Appellant was entitled for consequential relief arising out of those proceedings. This clearly indicates that the drawback benefit arose put of Order-in-Original dated 31.05.2012 and Hon'ble Tribunal only upheld the same. 5.5.1 The value declared by the Appellant was accepted initially in the Order in Original dated 31.01.2005 passed by the Commissioner of Central Excise Delhi III. However, this order while setting aside by Hon'ble CESTAT vide Final order dated 14.09.2006. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be paid to the claimant in addition to the amount of drawback, interest at the rate fixed under section 27A from the date after the expiry of the said period of one month till the payment of such drawback. Filing of shipping bills itself is a claim for drawback and, therefore, interest would be payable in terms of section 75A of the Customs Act; (ii) The Commissioner (Appeals) was, therefore, not justified in holding that since the value declared by the appellant was accepted only by order dated 31.05.2012, which order was subsequently affirmed by the Tribunal on 07.10.2021, the appellant would be entitled to interest only from 31.05.2012 till the date of payment of drawback; (iii) Merely because the department had disputed the declared value in the Bills of Entry, thereby resulting in protracted litigation, the rightful dues of the appellant cannot be denied; (iv) As the proceedings initiated by the show cause notice dated 11.09.2003 were dropped, it would mean that the appellant was eligible to claim drawback when the let order was issued on 13.03.2003; (v) The findings recorded by the Commissioner (Appeals) that the goods were allowed to be exported provisionally and, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1) provides that drawback should be allowed of the duties of customs chargeable under the Customs Act on any imported material of a class or description used in the manufacture or processing of such goods or carrying out any operation of such goods. It also provides that the Central Government may make rules for the purpose of carrying out the provisions of sub-section (1). 21. Section 75A of the Customs Act provides for interest on drawback. Sub-section (1), which is relevant for the purpose of this appeal, is reproduced below: "75A. Interest on drawback (1) Where any drawback payable to a claimant under section 74 or section 75 is not paid within a period of one month from the date of filing a claim for payment of such drawback, there shall be paid to that claimant in addition to the amount of drawback, interest at the rate fixed under section 27A from the date after the expiry of the said period of one month till the date of payment of such drawback:" 22. As noticed above, drawback on imported materials used in the manufacture of goods which are imported is claimed under section 75 of the Customs Act. Section 75A of the Customs Act provides that where any drawback ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of one month from 31.05.2012 when the show cause notice was dropped by the adjudicating authority for the second time pursuant to the order passed by the Supreme Court and not from 13.03.2003 when the "let export order" was issued. 25. It is on the instance of the department that proceedings were initiated and ultimately the claim of the appellant was found to be correct and the drawback was sanctioned. In such circumstances the issue that would require consideration is whether 31.05.2012 should be the date relevant for the purposes of determining interest payable to the appellant. This date cannot be the relevant date. The appellant cannot be blamed or penalized for the prolonged litigation undertaken by the department. Rule 13 of the Drawback Rules, which has been referred to by the Commissioner (Appeals) in the impugned order, clearly provides that the shipping bills shall be treated as a claim for drawback filed on a date on which the proper officer of customs makes an order permitting clearance. The "let export order" was issued on 13.03.2003. Section 75A of the Customs Act provides that if the drawback is not paid within a period of one month from the date of filin ..... 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