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2022 (2) TMI 211 - AT - Customs


Issues:
- Interpretation of Section 75 of the Customs Act, 1962 regarding duty drawback on imported materials used in exported goods.
- Dispute over conversion of DEEC shipping bills into drawback shipping bills.
- Applicability of Kar Vivad Samadhan Scheme (KVSS) settlement on duty payment.
- Challenge to the Commissioner's decision on restricting drawback to 50% of FOB value.
- Compliance with terms and conditions for allowing conversion of shipping bills.

Analysis:
1. Interpretation of Section 75 of the Customs Act, 1962: The appellant contended that the Commissioner erred in restricting the drawback to 50% of FOB value, arguing that duty paid under a scheme should be treated as a regular import. Reference was made to a previous appellate order highlighting the impact of seized goods on export obligations. The tribunal noted the requirement of using imported materials in exported goods, emphasizing the need for proper documentation and record of seized goods to determine eligibility for duty drawback under Section 75.

2. Dispute over Conversion of Shipping Bills: The appellant's request for converting DEEC shipping bills into drawback shipping bills was initially rejected by the Commissioner, leading to a writ petition and subsequent High Court order for a fresh adjudication. The tribunal acknowledged the history of the dispute and the need for a speaking order based on merits, underscoring the importance of compliance with terms and conditions for such conversions.

3. Applicability of Kar Vivad Samadhan Scheme (KVSS): The appellant had settled a previous dispute under the KVSS by paying 50% of the duty, which was acknowledged by a certificate from the competent authority. This settlement raised questions regarding the treatment of duty payment in subsequent export transactions and its impact on duty drawback claims, necessitating a comprehensive review of the settlement's implications.

4. Challenge to the Commissioner's Decision: The tribunal scrutinized the Commissioner's decision to restrict the drawback to 50% of FOB value, finding it inconsistent with the requirements of Section 75 of the Customs Act. By referencing the lack of justification for this restriction and the absence of logic in the decision, the tribunal highlighted the need for a fresh speaking order aligning with statutory provisions and principles governing duty drawback claims.

5. Compliance with Terms and Conditions: The tribunal emphasized the importance of adherence to terms and conditions for allowing conversion of shipping bills, signaling the need for meticulous scrutiny and procedural compliance in handling such requests. The decision to remit the matter back to the Commissioner for a fresh order underscored the significance of due process and thorough consideration of all relevant factors in resolving the dispute effectively.

 

 

 

 

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