TMI Blog2021 (12) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... 982047 and 6982039 both dated 01.01.2015 and export goods covered under shipping Bill Nos.6998694 and 6997757 both dated 02.01.2015 had been seized carrying out the panchnama dated 08.01.2015. The DRI had allegedly noticed the shortage of 3205 Kg and 2990 Kg than what had been declared in the shipping bills. The goods were detained pending the inquiry and were handed over for safe custody. After the seizure of the goods as per Section 110 of the Customs Act, the DRI, Ahmedabad wrote a letter to the Joint/Additional Commissioner of Customs for giving No Objection for provisional release of seized goods - On execution of bond of 100% FOB value of goods along with 25% security in the form of Bank Guarantee, the same had been permitted. The show cause notice is issued by the authority for the shipping bills from the years 2011 to 2015. The list of shipping bills has been given barring a very few shipping bills which have been submitted here duty drawback has been paid to the petitioner for numerous shipping bills from 2011 to 2014 long before and therefore, any show cause notice issued after a period of three years from the date when drawback came to be paid, cannot be sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judiced and prejudged mind. 2. The brief facts leading to the present petition are as follows: - 2.1. The petitioners are having Import Export Code No.3003003976, 3009002041 and 3005001571 of M/s. SJS International, M/s. Greatway Overseas and M/s. V.V International respectively. It is engaged in the business of export of nut, bolts, washer, hand tools, etc. falling under Chapter Heading 7318, 8205, 3926, 3923 of the Customs Tariff Act, 1975. It is averred that the petitioners are exporting goods to the Gulf and Upper Gulf Countries after being registered with the office of the Director General Foreign Trade, Ludhiana. 2.2. The procedure which is conducted for the export under the Customs Act, 1961 (hereinafter referred to as the Act ) is to file shipping bills under Section 15 of the Act which would be assessed by the proper officer under Section 17 of the Act and value and classification of the goods under drawback schedule in case of drawback shipping bills are checked once the goods are received in the docks/warehouse. The Customs Broker (CB) will present to the customs office checklist with endorsement of custodian and other declaration along with original documents. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ of mandamus or certiorari or in the nature of mandamus or certiorari or any other appropriate writ, order or direction, quashing and setting aside the order in original dated 26th / 27th September 2019 and declare the same to be null and void; (d) Pending the admission and final disposal of the petition, this Honourable Court be pleased to stay the execution and implementation of the notice at Annexure A to the petition; (e)Pending the admission and final disposal of the petition, this Honourable Court be pleased to stay the execution and implementation of the order in original at Annexure B to this petition; (f)This Hon ble Court be pleased to grant an ad-interim relief in terms of para (d) and para(e); (g) To pass such other and further orders as are necessary in the interest of justice. 3. On issuance of notice respondent No.2 appeared and filed affidavit-in-reply. The Deputy Commissioner (SIIB), Customs House, Mundra has denied all averments unless specifically admitted. 3.1. According to the respondent No.2,the SCN is issued by the Additional Commissioner of Customs, Customs Commissionerate, Mundra as the impugned goods were exported from the Mundra Por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent that the further investigation was carried out and the search of the premise of M/s.SJS International, Jalandhar under the Panchnama dated 20.10.2015 was conducted. They were examined at the office of DRI, Ludhiana. The parallel invoices to overvalue the shipping bills to avail the undue drawback fraudulently by producing the department of customs at the time of export, deserved to be handled strictly. 3.6 It is also the say of the respondent that the decision of NEW PENSLA INDUSTRIES VS. COMMISSIONER OF CUSTOMS relied upon by the petitioners would not apply in the instant case, where the issue is related to the query raised by the drawback section regarding classification after partially sanctioning the drawback. The High Court rejected the department s query and allowed the drawback however, in this case, the issue is completely different. According to the respondents, the shipping bills of the exporters are self-assessed. In the past exports, the goods have been wrongly classified under CTH 8205 7000, 7325 9910, 7318 1900 and after the DRI booked the case, the exporters started mentioning the classification under CTH 7308 4000 which was upheld by the adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that they have misclassified the goods and the same are required to be reclassified. It is reiteratively the say of the petitioners that the respondent has acted beyond the jurisdiction vested in it. For the assessment of the goods and the valuation of the goods as well, the procedure is prescribed. At the stage of self assessment, the proper officer assessing the goods would either accept the assessment or would not. There are valuation rules for assessing the goods which are under valued and once finally assessed, the goods are ready for export. The SCN had been issued on the ground of under valuation after a lapse of long time, which is questioned by the petitioners that the same is impermissible when the goods are already exported. The exporter had already received the consideration for the exported goods as per the value declared before the Assessing Officer and that has to be treated as final and such valuation is not required to be disputed. 6.1 According to the petitioners, the value of the goods exported have been realised and the note from the Bank is also received by exporter. On the strength of the weight, the value has been calculated and according to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alued invoices to the department of Customs at the time of export. 7.4 Apt would be to refer to Rule 16 of the Drawback Rules, at this stage, which speaks of repayment of erroneous or excess payment of drawback and interest. Rule 16. Repayment of erroneous or excess payment of drawback and interest. - Where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962. 7.5 It is quite clear from the said Rule that any amount of drawback and interest when paid erroneously or is paid in excess of the entitlement of the claimant, on demand by a proper officer of the Customs, the claimant is required to repay the amount paid erroneously or in excess. Rule 16 of the Drawback Rules provides for recovery of an amount of drawback and interest paid erroneously or in excess of what the claimant is entitled to, on demand b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.2 The matter came up before this Court, where it firstly directed the review before the Revisional Authority and thereafter once again, when the petitioner approached before this Court, the Court held thus: 16. In the light of the facts and contentions noted hereinabove, the sole question that arises for consideration in this group of petitions is as to whether the concept of reasonable period is required to be read into rule 16 of the Drawback Rules which does not prescribed any period of limitation for recovery of drawback erroneously paid. 17.As noticed earlier, the drawback claims in all these petitions relate to the period between December 1995 to 1996, in relation to which, show cause notices came to be issued in February 2000. Thus, in all the cases, drawback claims had been processed and cleared before issuance of the clarification vide letter dated 20th September 1996 by the Commissioner (Drawback) with the approval of the Chairman of CBEC. On a close reading of the said letter, it is apparent that the same envisages finalization of pending drawback clai s in the light of the clarification issued therein, namely, that the maximum ceiling has to be inferred even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or whether the concept of reasonable period has to be read into it. In this regard, it is by now well settled by the Supreme Court in a catena of decisions that if the statute does not prescribe any period of limitation, the power thereunder has to be exercised within a reasonable time. What would be a reasonable period would, of course, depend upon the facts of each case. 19. In Government of India v. Citedal Fine Pharmaceuticals, Madras (supra), the Supreme Court has, in the context of rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956, which did not provide for any period of limitation, held thus: 6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back Schedule, no action was taken by the concerned authorities at the relevant time. It is only after a period of more than three years that show cause notices came to be issued to the petitioners seeking to recover the differential amount of drawback erroneously paid to them. Judging the period of delay from the armchair of a reasonable man, under no circumstances can the period of more than three years be termed to be a reasonable period for recovery of the amount erroneously paid. As held by the Supreme Court in the case of Collector of Central Excise, Jaipur v. M/s.Raghuvar (India) Ltd. (supra), where no period of limitation is prescribed, the courts may always hold that any such exercise of powers which has the effect of disturbing the rights of citizen should be exercised within a reasonable period of time. In the present case, the drawback had been paid more than three years prior to the issuance of the show cause notices, and despite the fact that clarification in respect of condition (c) of the Note under SS No.5404(1)(i) of the Schedule had been issued way back in the year 1996, no efforts were made to recover the drawback paid to the petitioners at the relevant time. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view to file review applications before the revisional authority on the merits of the applicability of the maximum ceiling of ₹ 62/- in cases falling under condition (c) of the Note under SS No.5404(1)(i) of the Drawback Schedule, on the ground that the revisional authority had not considered the said aspect and had laid emphasis on the limitation aspect of the matter. Thus, it is apparent that since in the earlier order, the revisional authority had considered the aspect of limitation only, review applications came to be filed before the revisional authority inviting a decision on merits as regards the applicability of the maximum ceiling to the cases of the petitioners. Viewed in the aforesaid context, the contention that as the question of limitation had not been raised before the revisional authority in the review applications, the petitioners are debarred from raising such contention before this court in these petitions deserves to be stated only to be rejected. 26. In the light of the aforesaid discussion, in the opinionof this court, though rule 16 of the Drawback Rules does not provide for any period of limitation, a reasonable period has to be read into the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority and in ignoring the binding precedents. Apt would be to refer to those words: [6.0] In view of the above and for the reasons stated above and the decision of this Court in the case of NBM Industries (Supra), the impugned orders passed by the respondent No.4 rejecting the refund claims of the petitioner cannot be sustained and they deserve to be quashed and set aside and are accordingly quashed and set aside and the respondents adjudicating authorities are hereby directed to sanction the respective refund claims of the claimant after following the law laid down by this Court in the case of NBM Industries (Supra) and pass fresh orders within a period of two months from the date of the receipt of the present order and to make the actual payment within a period of four weeks thereafter and also grant consequential reliefs which may be available to the petitioners under the relevant provision of the rules more particularly Rule 5 of the Rules. [6.1] Before parting with the present order, we are constrained to strongly disapprove such arbitrary act on the part of the lower adjudicating authority and/or lower authorities in ignoring the binding decisions/orders passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge by the pronouncement of the decisions by the Hon ble Supreme Court as well as this Court, the message has not reached to the concerned authorities, we direct respondent No.2 Central Board Excise and Customs, New Delhi to issue a detailed circular to all the adjudicating authorities considering the observations made by this Court in the present judgment and order as well as the law laid down by the Hon ble Supreme Court in various decisions referred to in the present judgment and order, within a period of 30 days from the date of receipt of the present order so that such eventuality may not happen again and again. 10. In the instant case, the grievance on the part of the petitioners is that the Order-in-Original does not recognize the issue of limitation although the same being the settled law. Here the petitioners have exported the articles from Mundra Port and had claimed that drawback and benefit under the Focus Product Scheme (FPS). The allegation has been that it had indulged in misuse of drawback scheme and FPS and other exports incentives by way of making export of scaffolding items falling under CTH No.7308 by placing under CTH Nos.731816000, 39235010, 39269099 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls are concerned. As held by this Court in case of PRATIBHA SYNTEX LIMITED vs. UNION OF INDIA OTHERS, Rule 16 of the Drawback Rules though does not provide for the period of limitation, the reasonable period of limitation has to be read into the same and the SCN issued before expiry of a period of three years from the date of payment of the drawback to the petitioner cannot provide a reason for the Court to hold that the same as time barred. 14. The petitioners have shown the procedure for export of goods. It is a detailed procedure to urge that the petitioners have exported the goods following the procedure upon the export permitted by the proper officer and the final shipping bills being generated, the petitioners were entitled to duty drawback as the shipping bills were filed through EDI system. Under the EDI system, once the final shipping bill is generated, the same becomes the final claim for the duty drawback according to the petitioner and the same needs to be paid within three working days as per the Circular No.25 of 2000 of the department. 15. We note that the show cause notice is issued by the authority for the shipping bills from the years 2011 to 2015. The li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory provision permits the same, settled legal position would preclude such challenge when made beyond a specific time period. Additional reason is of the time stipulated for clearing the shipping bill which is of three days (3) and any late clearance also cannot furnish the reason to permit issuance of the SCN calculating from the date of payment of duty drawback. Even if, this angle is not dilated and left to the parties to argue before the concerned authority, at the best, for those bills where payment of duty drawback is within 3 years of the issuance of SCN, the adjudication can be permitted. This has not been at all considered in the order in original. Again, with no challenge having been made by the department to the decision of the proper officer where many of the aspects of the petitioners have been accepted and with non consideration of the decision of this Court as discussed at length, interference would be necessary. 19. The initiation of the action on the part of the DRI on an intelligence of is severally questioned when the proper officer has already held in favour of the assessee classifying the item of export under a different head. Reliance is placed also u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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