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In Re : Texport Industries Pvt. Ltd.

Recovery of duty drawback granted earlier due to non realization of foreign exchange - scope of sub-rule (5) of Rule 16A of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 introduced as per Notification No. 30/2011 - retrospective effect to be given or not - Held that:- as Rule 16(A)(5) of the Customs, Central Excise and Service Tax Drawback Rules, 1995, as amended, was made effective w.e.f. 11-4-2011 only and all export proceeds due to be realized prior to this date would no .....

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elong and the period when the realization of export proceeds become due pertains to a period when the said RBI circulars and provisions of FTP 2009-14 were in force and Rule 16A(5) did not exist. The detailed findings of lower authorities regarding recovery of drawback amount in view of the said RBI circulars have also not been challenged by the applicant and Government finds that such findings of lower authorities and orders thereof continue to hole ground.

Recovery of drawback with .....

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ice Tax (Appeals), Tiruchirapalli with respect to Order-in-Original passed by the Assistant Commissioner of Customs (Drawback), Customs House, Tuticorin. 2. Brief facts of the case are that the applicant has exported goods for an amount of ₹ 64,33,993/- covered under Shipping Bills No. 1891278, dated 1-3-2008, 1889228, dated 27-2-2008 and 1879906, dated 8-2-2008 under the claim for Drawback. The applicant was sanctioned and paid drawback amounting to ₹ 7,15,378/- under the provi .....

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due process of law, the adjudicating authority demanded the ineligible drawback already availed by the applicant with applicable interest. 3. Being aggrieved by the said Order-in-Original, applicant filed appeal before Commissioner (Appeal), who rejected the same. 4. Being aggrieved by the impugned Order-in-Appeal, the applicant has filed this Revision Application, under Section 129DD of Customs Act, 1962 before Central Government on the following grounds : 4.1 The applicant subm .....

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es off the sale proceeds on merits. (d) The Foreign Mission of India issues a certificate as to the non-recovery of sale proceeds from the buyer. The applicant has fulfilled all the above vide Para 3(c) at Page 2 of the Order-in- Original. The Commissioner Appeals has therefore erred in ordering recovery of the drawback amount. 4.2 The applicant submits that the Assistant Commissioner has relied on pre-amended Rule 16A and notifications and circulars issued by RBI prior to the introduction .....

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of CCE v. Mysore Electrical Industries [2006 (204) E.L.T. 517 (S.C.)] the issue was whether the ruling under Rule 37B of the Central Excise Act issued by the Board re-classifying the Single Panel Circuit Breakers under CTH 85.37 as against the previously approved. The applicant submits that the rationale of the said judgment has to be applied not only to Board s ruling under Section 37B of the Central Excise Act or Circular but also to notifications amending the rule thereby granting benefit to .....

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in the case of Karvembu & Co. v. U.S. Dept. of Revenue [2010 (20) S.T.R. 591 (Mad.)]. 4.5 It is submitted that it is a settled law that in procedural matters, the law prevailing on the date of issue of show cause notice has to be taken into consideration. It is further submitted that the Hon ble Supreme Court in the case of Rochiram & Sons v. Union of India reported in 2008 (226) E.L.T. 20 (S.C.) has held that substantive laws are generally not retrospective unless specified contrar .....

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ld that any amendment in procedural law shall have retrospective effect even if it is not specifically mentioned that the amendments has retrospective effect. 4.6 It is submitted that it will be invidious distinction, if the exporter who filed shipping bill on 10-4-2011 asked to shell out the drawback amount while the one who made it on 11-4-2011 avails the benefit. 4.7 It is submitted that the demand notice was issued on 15-4-2014 and at this time the amended rule atone can apply. To .....

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the rule is involved, it has got to cover a period upto five years prevailing the date of issue of notice . In other words, the law as it prevailed on the date of issue of notice will prevail. 5. Personal hearing was scheduled in this case on 25-3-2015. Shri Derrick Sam, Advocate attended hearing on behalf of the applicant. Nobody attended the hearing on behalf of the department. The Department vide their written submission dated 4-12-2014 mainly reiterated contents of impugned Orders. 6.&e .....

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that the applicant failed to realize sale proceeds in respect of impugned exports. Commissioner (Appeals) upheld impugned Order-in-Original. Now, the applicant has filed this Revision Application on grounds mentioned in Para (4) above. 8. Government notes that the applicant has contended that though they failed to realize foreign remittance, their loss was compensated by Export Credit Guarantee Corporation (ECGC) and their authorized dealer Canara Bank wrote off the requirement of the expor .....

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orts made by the applicant during period of February/March, 2008 are not eligible for benefit under above said provision. In view of rival contentions, Government now proceeds to examine various statutory provisions relating to this case. 8.1 The applicant has placed heavy reliance on sub-rule (5) of the Rules 16A of the said Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, which was introduced vide Notification No. 30/2011, dated 11-4-2011. The said notification reads a .....

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Act, 1944 (1 of 1944) and section 93A read with section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, namely : - 1. (1) These rules may be called the Customs, Central Excise Duties and Service Tax Drawback (Second Amendment) Rules, 2011. (2) hey shall come into force on the date of their publication in the Official Gazette. 2. In the Customs, Ce .....

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on of sale proceeds is compensated by the Export Credit Guarantee Corporation of India Ltd. under an insurance cover and the Reserve Bank of India writes off the requirement of realisation of sale proceeds on merits and the exporter produces a certificate from the concerned Foreign Mission of India about the fact of non-recovery of sale proceeds from the buyer, the amount of drawback paid to the exporter or the claimant shall not be recovered.         F. N .....

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R. 80(E), dated the 10th February, 2011. The important aspects of the said Notification No. 30/2011, dated 11-4-2011, by which said sub-rule (5) of Rule 16A was introduced are as follows : (a) Vide Clause 1(2) of the said Notification, the above said amendment comes into force on the date of their publication in the official Gazette i.e. only from 11-4-2011; (b) The benefit under sub-rule (5) of the Rule 16(1) of the said Rules, 1995 is applicable only on cumulative fulfilment of certain conditi .....

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4-20011, whereas, the impugned exports pertain to year February/March, 2008. As such, the provision of sub-rule (5) of Rule 16(A), which came into effect only from 11-4-2011 cannot be extended to exports of 2008 for which export remittances had to be realized within 12 months from the date of export. Any action for recovery will be governed by the provisions of law as it existed as soon as the amount became due. There is no mention in the said Notification that the Notification applies retrospec .....

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ent notes that facts of the case of M/s. Uttam Steel Ltd. are different as it pertains to changes in procedure of an already existing law viz. change in time limit prescribed within already existing Section 11B of Central Excise Act, 1944. In the present case, an absolutely new Rule has been introduced and the date from when it will become effective, is also specified in the notification. Therefore, the ratio of said judgments cannot be made applicable to this case. Further, Hon ble Supreme Cour .....

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