TMI Blog2010 (9) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent. [Judgment per : V.C. Daga, J.]. - This petition, Under Article 226 of the Constitution of India, is filed by the petitioner-Union of India to challenge the order dated 23rd November, 2004 passed by the Settlement Commission, Additional Bench, Customs Central Excise at Mumbai ("the Commission" for short) contending that the Commission has no jurisdiction to settle the proceedings initiated by the Customs for the recovery of drawback. Factual Backdrop : 2. The factual matrix giving rise to the present petition, in nutshell, is that the proceeding were initiated against respondent Nos. 2 to 7 and others by the Revenue by issuing show-cause-notice, inter alia; for recovery of duty drawback amounting to Rs. 2,07,71,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against one ruling that Settlement Commission has jurisdiction to entertain such case. 5. The Commission vide its majority order dated 27th January, 2004 overruled the objection taken by the Revenue challenging jurisdiction of the Commission and vide its final order dated 23rd November, 2004 settled the case at duty liability of Rs. 2,07,71,436/- with interest thereon at the rate of 10% per annum for the time lag i.e. between the date of receipt of duty drawback amount and the date of its pay back. Immunity from fine, penalty and prosecution also granted to all the applicants under the said order. 6. The aforesaid order of the Settlement Commission is a subject matter of challenge in this petition as indicated in the opening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneously paid, on the premises that assessment involved quantification of duty and went on to further holding that without assessment, erroneous payment of duty drawback cannot be detected. Mr. Desai further urged that the Commission erroneously held that recovery of drawback is nothing but recovery of duty element along with declarations made in the shipping bill and, therefore, covered within the meaning of Section 127-A(b) of the Act. According to him, the Commission has failed to appreciate that verification of amount of drawback is carried out with reference to parameters under which said drawback is permissible i.e. whether the goods are of the description/specification mentioned in the Drawback Table and the amount claimed is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of duty. Reliance is placed on the definition of word "drawback" defined in Drawback Rules. Reliance is placed on sub-rules (1) and (2) of Rule 3 of the Drawback Rules to establish direct nexus between duty paid and the amount of duty to canvass that duty drawback is part of duty itself. He further submits that since the duty drawback is directly related to duty, all cases which deal with drawback also can be settled before the Settlement Commission. He further submits that exclusion of jurisdiction must not be inferred easily. This more so when the Parliament has consciously left certain matters out of the scope of the Settlement Commission. In support of his submission, he pressed into service fourth proviso to sub-section (1) of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act in respect of a "case" which, in turn, is defined under Section 127-A(b), ibid as "any' proceeding under this Act or any other act of the levy, assessment and collection of customs duty, a proceeding for recovery of drawback of duties could be treated as a "case" as defined in the Act and that application before the Settlement Commission was very much maintainable in accordance with law. 14.The Settlement Commission while considering the issue before it, relied upon the term "drawback" as defined in Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 and the Drawback Rules and also Section 74 of the Act dealing with the imported material used in the manufacture of goods which are exported. They also considered sw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of drawback to be determined on a consideration of all the circumstances prevalent in a particular trade and also based on the facts situation relevant in respect of each of various classes of goods imported. Basically, the source of duty drawback receipt lies in Section 75 of the Customs Act and Section 37 of the Central Excise Act. 18. Analysing the concept of remission of duty drawback and DEPB, we are satisfied that the remission of duty is on account of the statutory/policy provisions in the Customs Act/Scheme(s) framed by the Government of India. In the circumstances, we hold that profits derived by way of such incentives do not fall within the expression "profits derived from industrial undertaking" in Section 80-IB." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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