TMI Blog2015 (9) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... ised under Section 129DD of the Act. As such mention of Central Government in Rule 17 ibid does not refer to Joint Secretary, Revision Application or empower him on behalf of Central Government for the purpose of Rule 17 ibid. Government observes that the Commissioner (Appeals) exercises quasi-judicial authority u/s 128A of the Customs Act, 1962 being the first level of appeal against orders passed by officers lower in rank than a Commissioner of Customs. It would thus be beyond the scope of the powers conferred by the said Section for the Commissioner (Appeals) to exercise authority under a Section or a Rule for which he is not empowered. Hence, Government holds that in allowing relaxation u/r 17 ibid, the Commissioner (Appeals) has exceeded his statutory jurisdiction. The supplementary drawback claim was clearly time-barred in terms of Rule 15 ibid; and Commissioner (Appeals)’s order is not just and proper in holding that the claim cannot be treated as time-barred in reference to Rule 17 and has erred in directing the lower authority to admit the claim and process it as per law. Revision allowed. - F.No. 380/04/DBK/12-RA(Remand) - 25/2015-CUS - Dated:- 22-9-2015 - Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled supplementary drawback claim for the period from May, 2005 to February, 2010 with the Deputy Commissioner of Customs, Drawback Department, ICD, Dighi, under Rule 15 ibid, claiming an amount of ₹ 1,53,69,337.34. The contention of the respondent is that the department had taken into account for the purpose of computation and working of alleged excess payment of drawback, only those shipping bills wherein the drawback sanctioned to the petitioner under Rule 6 was more than the drawback allowable under Rule 3 (All Industry Rate of Drawback). According to them, drawback sanctioned to them in respect of certain shipping bills under Rule 6 was less than the drawback allowable to them under Rule 3 and in such case, the supplementary drawback claims were filed by the respondents. The Assistant Commissioner of Customs, ICD (Dighi) rejected the claims on the ground that the supplementary claims were time barred and also on the ground that the Order-in-Original No. 31/2010-11, dated 21-3-2011 passed by Commissioner of Customs and Central Excise, Pune did not cover drawback claims pertaining to the Shipping Bill covered in supplementary claim. 3. Aggrieved of the above rejection b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Order-in-Original is in fact for recovery of drawback under Rule 16 of the Drawback Rules which was paid in excess of the All Industry Rate under Rule 3. 4.3 The said Order-in-Original does not relate to the settlement of drawback claims - either by way of All Industry Rate (Rule 3) or Brand Rate (Rule 6). The said order has nothing to do with the rejection of the original drawback claims (for Shipping Bills pertaining to 2005 to 2007 etc.) and hence, the date of Order-in-Original (21-3-2011) cannot be taken as the relevant date for finalization of the drawback claims. 4.4 The Commissioner (Appeals) in his order has held that the respondent has given a reason for filing supplementary claim in terms of Rule 17 of the Drawback Rules read with C.B.E. C. Circular No. 82/98-Cus., dated 29-10-1998. In this regard it is to be noted that the Circular relates to the subject of condonation of delay in filing application for fixation of Brand Rate under the Customs and Central Excise Duty Drawback Rules, 1971/1975. The said Circular has no relevance to the condonation of delay in filing of the supplementary drawback claims and hence, appears to have been wrongly quoted in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the respondents are entitled for drawback under All Industry Rate of drawback only. However, the Commissioner has not considered those cases where the drawback already granted under Rule 6 was lower than the All Industry Rate of drawback otherwise admissible them, as held by the Commissioner. The respondents submit that the department should have granted drawback under All Industry Rate of drawback, even in respect of those export in respect of which, no recovery proceedings were initiated. The said submission is based on the decision of Supreme Court in Unichem Laboratories Ltd. v. Collector - 2002 (145) E.L.T. 502 (S.C.). Since the Commissioner while adjudicating the 3 show cause notices, did not consider the submission of the respondent that they are entitled to drawback under Rule 3 (i.e. under All Industry Rate of Drawback) to the tune of ₹ 1,53,69,337/-, the respondents filed the supplementary claim under Rule 15. It is submitted that the supplementary claim filed by the respondents under Rule 15 cannot be treated as time-barred. 5.2 Without prejudice, extension of period for supplementary drawback claims may be granted under Rule 17. It is well settled law tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of respondent. During the course of hearing, the respondent stated that the supplementary claim has arisen out of Commissioner s order dated 21-3-2011 and therefore relevant date under Rule 15(1) proviso (iii) will be date of settlement of original drawback claim viz. 21-3-2011 and not date of disbursement of drawback; that referring to Hon ble Court s order, the Revisionary Authority is now required to settle the issue of condonation of delay under Rule 17 of the Drawback Rules. They also relied upon C.B.E. C. s Circular 82/98-Cus., dated 29-10-1998 Sr. No. 1 of Annex and Circular 4/2000-Cus., dated 12-1-2000 Sr. No. 11 and stated that period of condonation beyond the period permitted under Rule 6/7 is 90 days from date of rejection of claim and their case is squarely covered under the reason for delay given therein. 6.2 Shri Ashish Kutti, Asstt. Commissioner of Customs, Pune attended the hearing on 25-8-2015 on behalf of the applicant department. The applicant department reiterated grounds of Revision Application and stressed that it is a clear case of misdeclaration and the exporter was very well aware that All Industry Rate existed but applied for Brand Rate fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept open now by the Hon ble High Court to argue the same before the Revisionary Authority. However it is pertinent to note that the issue is whether the supplementary claim filed by the petitioner is within the time-limit from the date of Order of the Commissioner, i.e. 21-3-2011 and whether the date of Order of the Commissioner which does not pertain to this issue can be considered as relevant date. It is a fact that this date cannot be taken as the date for filing supplementary claim for Shipping Bills pertaining to the year 2005 to 2007. Since the date of order of the Commissioner cannot be considered as the relevant date, the question of condoning the delay beyond 30 days does not arise. It is observed that the subject show cause notices and the Order-in-Original No. 31/2011 passed by the Commissioner does not cover claims for drawback against export of goods under cover of shipping bills included in the instant supplementary claims. The said Order of the Commissioner covers recovery of drawback of excess amount of drawback sanctioned and paid. Therefore the grounds adduced for supplementary claims are misconceived. 6.2.3 The Assistant Commissioner has categorically mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck claim. Therefore the provisions of Rule 17 cannot be invoked. Rule 15 of Drawback Rules, 1995 specifically provides for the supplementary claim within three months where any exporter finds that the amount of drawback paid to him is less than what he is entitled to on the basis of the amount or rate of drawback determined by the Central Government or Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, he may prefer a supplementary claim. In the instant case as the claim is not filed within three months from the date of sanction of the original claim and there is no request application for condonation of delay from the petitioner to the original drawback sanctioning authority, the question of condonation of delay does not arise at a later stage. The petitioner has to put forth the grounds which are beyond their control for delay in submission of supplementary claims and the original sanctioning authority has to consider the same. If the original drawback sanctioning authority fails to consider the request for condonation, then only the petitioner has an option to approach higher Central Government Authority for relaxation of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with the law and to decide whether the order passed by the Commissioner (Appeals) specifically referring to Rule 17 is legal and proper or not. 9. In this regard, Government notes that there are two issues which are to be primarily addressed and answered in this case for the purpose of revision as per directions of the Hon ble High Court. These are : (a) Whether the supplementary drawback claim filed under Rule 15 of the Drawback Rules, 1995 by M/s. Cummins India Ltd. is hit by limitation or not. (b) Whether limitation period for filing supplementary drawback claim under Rule 15 ibid can be relaxed by exercise of authority under Rule 17 ibid. 10. Government now proceeds to address each issue. In order to understand the issue at (a) above, the provision of Rule 15 ibid are perused, which are as under : Rule 15. Supplementary Claim . - (1) Where any exporter finds that the amount of drawback paid to him is less than what he is entitled to on the basis of the amount or rate of drawback determined by the Central Government or Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, he may prefer a supplementar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement of the original drawback claim by proper officer. This period of 3 months can be extended by Assistant Commissioner/Deputy Commissioner of Customs for a further period of 9 months on being satisfied that exporter was prevented by sufficient cause from filing claim in time. There is no provision in statute for further extension thereof. In this case, the original authority settled the drawback claim based on brand rate fixation in the years 2006 to 2010 and supplementary claim was admittedly filed only on 22-3-2011. The Assistant Commissioner/Deputy Commissioner of Customs is empowered to condone delay upto 9 months only. In any case, admittedly no such request for condonation of delay was filed by the respondent. So the claim was clearly hit by time limitation. 13. Government further finds that the contention of the respondent that the relevant date under Rule 15(1) proviso (iii) would be the date of passing of Order-in-Original dated 21-3-2011 by Commissioner of Customs, Pune is not tenable. 13.1 It is a fact on record that the said order is restricted to the issue of recovery under Rule 16 ibid of erroneous drawback claimed by the exporter by misdeclaration. Moreove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im under Rule 15 ibid. 15. Government observes that the respondent in support of its contention has also relied on C.B.E. C. s Circulars 82/98-Cus., dated 29-10-1998 (Sr. No. 1 of Annexure) and 4/2000-Cus., dated 12-1-2000. Circular 82/98 at Sr. No. 1 of the Annexure deals with a scenario where applicant s claim is rejected by Original/Appellate authority as not admissible under All Industry Rate and thereafter the exporter needs to file application for fixation of brand rate. In the present case, the drawback claim was not per se rejected by either the sanctioning or appellate authority. Circular 4/2000-Cus. applies to cases where drawback under Section 74 has been rejected and exporter is advised to file it under Section 75. Thus both the Circulars are found to be inapplicable to the present case. 16. Therefore, Government finds that in the present case, the relevant date for the purpose of limitation under Rule 15 ibid is the date of settlement and payment of original drawback claims by the proper officer and not the date of Order-in-Original No. 31/2010-11, dated 21-3-2011 as passed by the Commissioner for recovery of excess drawback paid. As the claims were not filed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Central Government s powers are exercised by different authorities based among other on the executive or quasi-judicial function being performed. 21. The powers of revision of the Central Government under the Customs Act, 1962 are prescribed under Section 129DD, which reads as below : Revision by Central Government - (1) The Central Government may, on the application of any person aggrieved by any order passed under section 128A, where the order is of the nature referred to in the first proviso to sub-section (1) of section 129A, annul or modify such order : Provided that the Central Government may in its discretion, refuse to admit an application in respect of an order where the amount of duty or fine or penalty, determined by such order does not exceed five thousand rupees. Explanation. - For the purposes of this sub-section, order passed under section 128A includes an order passed under that section before the commencement of section 40 of the Finance Act, 1984, against which an appeal has not been preferred before such commencement and could have been, if the said section had not come into force, preferred after such commencement, to the Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 28. 22. From a perusal of the above Section, Government observes that the revisionary powers are specific, quasi-judicial in nature and restricted to the confines of the Section i.e. to be exercised through the revisionary authority only in cases of orders passed by Commissioner (Appeals) under Section 128A of the Act with reference to cases as specified in the first proviso to sub-section (1) of Section 129A. The fact that Government under Section 129DD performs quasi-judicial function is further reinforced by Hon ble Supreme Court s judgment in the case of Indo-China Stream Navigation Co. Ltd. v. Jasjit Singh, Additional Commissioner of Customs - 1983 (13) E.L.T. 1392 (S.C.) wherein it has been held that status of a Tribunal is accorded to the Central Government in its capacity as a revisionary authority. 23. Therefore, Government holds that the powers given under Rule 17 ibid are beyond the scope of powers to be exercised under Section 129DD of the Act. As such mention of Central Government in Rule 17 ibid does not refer to Joint Secretary, Revision Application or empower him on behalf of Central Government for the purpose of Rule 17 ibid. 24. Government further note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after the judgment of High Court in the earlier Writ Petition, the papers were sent to the competent authority. Instead of deciding the matter of condonation of delay afresh the competent authority vide letters dated 22-12-2006 and 15-1-2007, without hearing the petitioner, communicated certain directions to the present Respondent No. 4. The said directions are reproduced in paragraph three of the impugned order dated 12-2-2007 and from the same, it is evident that the competent authority has decided the matter relating to condonation of delay against the petitioner on merits. 4. The procedure followed by the competent authority is not correct and is also not in accordance with the directions given by this Court. In fact, if such directions were given to the subordinate officer, then the said officer would have no discretion except to act in accordance with the directions given to him and this is exactly what he has done while passing order dated 12-2-2007. Needless to say that the hearing given by Respondent No. 4 to the petitioner, was not a hearing given by the competent authority as contemplated by the judgment and order passed by this Court in the earlier Writ Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for which he is not empowered. Hence, Government holds that in allowing relaxation under Rule 17 ibid, the Commissioner (Appeals) has exceeded his statutory jurisdiction. 26. Government also holds that the provisions of Rule 17 ibid cannot be invoked either at the stage of Commissioner (Appeals) or in the present proceedings in Revision. In the present case, it is a fact on record that there is no condonation of delay application either before original authority under Rule 15 or such a representation before the competent authority under Rule 17. Relaxation under Rule 17 should have been invoked before the competent authority prior to filing of supplementary claim. The respondent has not produced any condonation of delay from the competent designated authority. Moreover, no relief under Rule 17 can be given by the Commissioner (Appeals) or by the revisionary authority who are circumscribed by way of exercise of their powers under Sections 128A and 129DD of the Customs Act, 1962 respectively. 27. In view of the above discussion, Government finds force in the pleading of the applicant department and holds that the supplementary drawback claim was clearly time-barred in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X
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