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2015 (1) TMI 1266 - AT - CustomsRecovery of amount of Drawback under Rule 16A of 1995 Rules - Sale proceeds of export not realised - Appellant realized the sale proceeds of exports through LCs and drawback was paid on the over-valued FOB of export revealed the market enquiry as well as and overseas enquiry. Also the importers were not engaged in export and import and preliminary payments received from “000 Business Kant” in Russia were returned back to the said importer - Held that:- as Revenue says that preliminary payments received from “000 Business Kant” have gone back to the account of said concern but there was no enquiry made to ascertain whether any such payments were remitted by appellants only to that concern from India or any arrangement was made in that behalf. Therefore Rule 16A ibid cannot be invoked but the only rule can be invoked was Rule 16 of 1995 Rules. Confiscation of goods - Under Section 113(d) of Customs Act, 1962 - Held that:- relating to the exports under Debt Repayment Agreement with the erstwhile USSR, export to third country was not allowed and exports were made to countries other than Russia. . Accordingly such exports were made in violation of the instructions issued by the DGFT under para 4.17 of the EXIM Policy, 1997-2002 and Para 2.15 and 2.40 of EXIM Policy, 2002-07, making the exported goods liable to confiscation under Section 113(d) of the Customs Act, 1962 by virtue of Section 11 of the Foreign Trade (Development & Regulation) Act, 1992 read with Section 3(2) & 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. There is also a violation of Rule 11(1) of the Foreign Trade (Regulation) Rules, 1993. Therefore, all these violations rendered the goods to be confiscated being the prohibited goods. Period of limitation - Absence of the limitation provisions in Rule 16/16A of 1995 Rules - No open ended litigation to perpetuate. It issued original Show Cause Notice on 27-3-2006 and the Addendum on 31-8-2006 for recovery of drawback relating to the period was 1-10-1999 to 10-10-2003 - Held that:- by following the decision of Hon’ble High Court of Gujarat in the case of Pratibha Syntex Ltd. v. Union of India 2013 (3) TMI 480 - GUJARAT HIGH COURT and the decision in the case of Padmini Exports Vs. Union of India 2013 (1) TMI 282 - GUJARAT HIGH COURT, that drawback erroneously paid being recoverable through Rule 16 of 1995 Rules and there is no prescription of any reasonable period, the proceeding is time barred when show cause notice was issued after a reasonable period. Therefore, the Show Cause Notice issued on 27-3-2006 does not appear to be beyond a reasonable period, results in not time-barred. Imposition of penalty - Held that:- so far as imposition of penalty is concerned mens rea plays a vital role to determine quantum thereof. Therefore, the penalties imposed by the adjudication without stating any reason as to imposition and determination of quantum thereof, appears to be disproportionate, in existence of conflicting evidence on record. - Decided in favour of appellant
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