IS DRI has power to issue the SCN in DBK case, Customs - Exim - SEZ

[Gurjeet Singh Walia]

As the DRI is the proper officer of Customs for the issuing show case and recovery of duties under section 28 as per amendment made vide notification issued in 2011 but the recovery of DBK is not under section 28 so is they are the competent authority to issue show cause notice in the DBK Cases.

Posts / Replies

[surya narayana]

Dear Friend,

If my remembrance goes right , Last year, CBEC issued various guidelines including Notifications/circular stating that Now , DRI also can issue the Show Cause Notice.

You may pl. check for those guidelines/clarifications for better clarity.

Best Regard

S Suryanaryana

S

[KASTURI SETHI]

Sh.Surya Narayana Ji,

Sir, DRI can issue SCN. I also remember instructions were issued. Here is case of drawback which is sanctioned by the concerned Commissioner. Normally drawback or refund sanctioning authority issues SCN. Am I right ? I want your opinion. Thanks.

Regards.

K.L.SETHI

[Gurjeet Singh Walia]

I do not agree at all as per cir. no. 24/2011 cust. its clear that the DBK show cause notice has to be issued under Rule 16 of DBK Rule and not under section 28 and as per even new amend. DRI can issue the show case notice under section 28 only. Pls advice

[KASTURI SETHI]

Sh.Gurjeet Singh Walia Ji,

Pl. go through the latest case law on this issue. CESTAT judgement is based on High Court and Supreme Court.

2016 (5) TMI 1192 - CESTAT NEW DELHI - Monte International Versus Commissioner of Customs

Jurisdiction - Whether the show-cause notice issued by DRI for recovery of erroneously granted drawback in terms of Rule 16 of Customs and Central Excise and Service Tax Drawback Rules, 1995 can be held valid show-cause notice - Held that:- in the case of Era International v. Union of India [2011 (8) TMI 885 - Punjab and Haryana High Court] wherein the Hon'ble Punjab and Haryana High Court following the decision in the case of CC Vs. Sayed Ali [2011 (2) TMI 5 - Supreme Court] has held that the preventive office cannot be the proper officer for issuance of show-cause notice to seize the goods. As no such amendment was made under Rule 16 of Customs and Central Excise and Service Tax Drawback Rules, 1995 in respect of issuance of show-cause notice. In fact, the amendment dated 6.7.2011 was made only in section 28 was retrospective with effect from 16.9.2011 and the circular CBEC dated 31.5.2011 was only for the amendment limited for proper officer under Rule 16 of Customs and Central Excise and Service Tax Drawback Rules, 1995. The said circular did not consider that the DRI officers are to be the proper officers under Rule 16 of Customs and Central Excise and Service Tax Drawback Rules, 1995 but as no retrospective amendment carried out in the said rule so far as conformation of jurisdiction by DRI officers for issuance of show-cause notice is concerned, therefore, the DRI officers have no jurisdiction to issue show-cause notice for recovery of erroneously drawback claim under Rule 16 of Customs and Central Excise and Service Tax Drawback Rules, 1995.

Demand of duty and imposition of penalty - Section 114 of the Customs Act, 1962 - - Fraudulent export of bicycle parts under export execution (sic : promotion) scheme like drawback DEPB etc. - Availed excess drawback claim erroneously - Held that:- the impugned goods was examined at the port of shipment and no single discrepancy was detected in regard to description, quality, quantity or value of the goods. All the consignments were examined found to be correct and the goods were assessed, thereafter let export order was issued. Further, it is found that no incriminating documents found by DRI during the course of search at the residence of various partners or the officers of the appellants. The only allegation against the appellant is that the Consulate General of India at Dubai has given report showing that only small fraction of iron was auctioned by Dubai DHS 31000 equivalent to ₹ 3,10,000/-. It was also found that out of 3 merchants/financiers only one company was not found at the address. The allegation of the Revenue is that the goods overvalued as the goods have been examined at the end of the supplier also. Therefore, it cannot be alleged that the goods were undervalued in the absence of contemporaneous price for the purpose of like kind of goods.

I further find that the Revenue is heavily relied on the statement of Shri Navdeep Goyal representative of shipping agency but he was not made available for cross-examination. Therefore, the said statement cannot be relied on. During the course of investigation, it was found that the appellant exported bicycles parts which were procured from various suppliers who processed the bicycles parts. There is no single evidence on record to show that the appellant has manufactured/ used sub standard raw materials and all the suppliers have admitted that they have provided goods to the appellants. The appellant is a regular supplier/exported various other consignments of bicycles parts of similar nature. No departmental officers were alleged that having conspiracy with the appellants and there is verification report is on record. Therefore, in the absence of any supportive evidence except the report from the Consulate General of India at Dubai which is also not conclusive. In the absence of any such supportive evidence, it cannot be alleged that the appellant has availed excess drawback claim erroneously. Therefore, I do agree for setting aside the demand on merits. - Decided in favour of appellant with consequential relief

[Gurjeet Singh Walia]

Thanks Sir Same is my opinion.

[KASTURI SETHI]

Dear Sh.Walia Ji,

O.K. But replied very late.