2008 (4) TMI 115 - AT - Customs

Export drawback claimed subsequently it was noticed that goods were not cleared at the port of destination since goods are not available for confiscation imposing redemption fine in this case may not be warranted - interest became payable till the date of payment. Therefore it is clarified that even in the absence of specific order of the Commissioner the provisions of Section 75 A(2) will operate and the interest on erroneous drawback becomes payable

Summary

Issues:
1. Confiscation of goods and imposition of redemption fine.
2. Appropriation of the sum paid during investigation towards the demand of draw back.
3. Recovery of interest on erroneously obtained draw back.

Analysis:

Issue 1 - Confiscation of goods and imposition of redemption fine:
The Department argued that the Commissioner should have confiscated the goods or imposed a redemption fine. They cited relevant cases in support of their argument. However, the Tribunal noted that since the goods had already been exported and were not available for seizure, confiscation was not feasible. The Tribunal clarified that confiscation is penal in nature, and the offer of redemption is a concession. The cases cited by the Department were deemed inapplicable to the current scenario. The Tribunal concluded that imposing a redemption fine in this case may not be warranted.

Issue 2 - Appropriation of the sum paid during investigation:
The Department contended that the sum paid by the respondent during the investigation should have been appropriated towards the demand of draw back. The Tribunal found that the amount deposited by the respondent was clearly recoverable as per the Commissioner's order. They stated that there was no issue in appropriating this amount, even without a specific order from the Commissioner.

Issue 3 - Recovery of interest on erroneously obtained draw back:
The Department argued that interest should be recovered on the erroneously obtained draw back as per Section 75A(2) of the Customs Act. The Tribunal clarified that interest is mandatory under the said section and becomes payable automatically from a specified date. They emphasized that the provisions of Section 75A(2) would apply, and interest would be payable even without a specific order from the Commissioner.

In conclusion, the Tribunal disposed of the Department's appeal, providing detailed reasoning for each issue raised.