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TMI Blog2025 (5) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... 1887/2022 SCA No. 1886/2022 SCA No. 1884/2022 M/s. Friends & Friends Shipping Pvt. Ltd. M/s. Friends Mercantile Pvt. Ltd. M/s. Kandla Export Corporation SCN No. & Date IV(6)INV/RUI/45/10/3491 dtd. 16.11.2010 IV(6)INV/RUI/45/10/441 dtd. 28.02.2011 IV(6)INV/RUI/ 45/10/742 dtd. 28.03.2011 Period of Dispute 2006-07 to 2009-10 2006-07 to 2008-29 2006-07 to 2008-09 Amount of Drawback Demanded U/r 16 of Drawback Rules, 1995 r.w. Section 28 of the Cus. Act, 1962 Rs. 39,74,651/- Rs. 67,18,635/- Rs. 1,67,14,797/- Order-in-Original No. & Date KDL/ADC/RHM/ 08/2022-23 dated 21.09.2022 KDL/ADC/RHM/14/2022- 23 dated 04.10.2022 KDL/ADC/RHM/ 15/2022-23 dated 06.10.2022 Drawback Demand Confirmed Rs. 39,74,651/- Rs. 67,18,635/- Rs. 1,67,14,797/- Interest Not Quantified Not Quantified Not Quantified Penalty under Section 114 Rs. 3,97,46,510/- Rs. 6,71,86,350/- Rs. 16,71,47,970/- Penalty under Section 114AA Rs. 39,74,65,100/- Rs. 67,18,63,500/- Rs. 167,14,79,700/- Penalty upon Tribhuwan Kumar Sanghavi, Director/Autho. Signa. S. 114(iii) & 114AA Rs. 3,97,46,510/- Rs. 39,74,65,100/- Rs. 6,71,86,350/- Rs. 67,18,63,500/- Rs. 16,71,47,970/- Rs. 167,14,79,700/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was inferred that the Petitioner had improperly claimed an irregular Duty Drawback of Rs. 1,67,14,797/- on the export of deoiled cake purchased from the Suppliers, which had been manufactured under bond by procuring duty-free Hexane, thereby availing the benefit of Rule 19(2) of CERs, 2002. 5.5 Consequently, a Show Cause Notice (F. No. IV(6)INV/RUI/45/10 dated 28.03.2011) was issued by the Joint Director, DGCEI, Indore, directing the Petitioner to show cause to the Additional Commissioner (DBK), Customs, Kandla (Respondent No. 3), as to why the Duty Drawback of Rs. 1,67,14,797/- should not be recovered under Rule 16 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995, read with Section 75 and the proviso to Section 28(1) of the Customs Act, 1962, invoking the extended period of limitation, along with applicable interest and penalties under Sections 114 and 114AA of the Customs Act, 1962, on the Petitioner No. 2 and Petitioner No. 3, as well as on the Suppliers under Section 114(iii) of the Customs Act, 1962. 5.6. The Petitioners, in their letter dated 12.05.2014, denied the allegations and averred that the Show Cause Notice be dropped. They also sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gality and validity thereof to quash and set aside the impugned Orderin- Original dated 06.10.2022 passed by the Respondent No. 3. c) That Your Lordships may be pleased to issue a Writ of Prohibition or any other appropriate writ, direction or order, completely and permanently prohibiting the Respondents, their servants and agents from taking any action against the Petitioner pursuant to Order-in-Original dated 06.10.2022 passed by the Respondent No. 3; d) That in the alternative, Your Lordships may be pleased to issue a Writ of Mandamus or any other appropriate writ, direction or order, directing the Respondent no. 3 to conduct fresh adjudication in the said Show Cause Notice in due compliance with principles of natural justice and adjudication procedure prescribed under the Customs Act, 1962 and after giving Petitioners an opportunity to revert to the documents relied upon in the Show Cause Notice along with a copy of the Show Cause Notice and cross examination of department's witnesses; e) Pending this petition, Your Lordships may be pleased to issue any order or direction ordering and directing the Respondents by themselves, their subordinate servants and agents to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te hearing etc., were never provided to the Petitioners and suddenly, the show cause notice came to be adjudicated after an inordinately long lapse of time on merits. In this context, this Court finds that the decision in SJS International Vs. Union of India reported in 2022 (380) ELT 577 (Guj.) is apposite, wherein, it has been held as under:- "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 failsto repay the amount it shall be recovered in the manner laid down in subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1995") read with Section 75 and proviso to Section 28(1) of the Customs Act, 1962 as well as to levy the penalty upon the petitioner under Section 114(iii) of the Customs Act, 1962." 8.5 Thus, the issue before this Court in the present bunch of petitions is similar to the issue which was decided in Dewas Soya(Supra), wherein, on merits, the said petition was allowed. This Court in Dewas Soya (Supra) has held as under:- "8. Having heard learned advocates for the respective parties and considering the facts of the case, it is not in dispute that the petitioner did not issue the ARE-2 while removing the DOC manufactured by using the Hexane without payment of Central Excise duty. However, as held by the Commissioner (Appeals) such non-issuance of the ARE-2 would not be for removal of the DOC manufactured out of the duty free procured Hexane by availing the benefit under Rule-19(2) of the Rules would not make any difference as there is no intention established Adjudicating Authority by the and the only allegation levelled against the petitioner stand on pre-condition that the petitioner exporter had knowingly or intentionally claimed the duty drawback erroneously. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the customs portion and not to the excise portion and therefore, the exporter did not get any double benefit in the facts of the said case. The aforesaid decision of Dewas Soya (Supra) has been followed in a bunch of other petitions namely in Dhultawala Exim Pvt. Ltd. Vs. Union of India and another reported in 2025:GUJHC:13675-DB. Following the aforesaid decisions which are squarely applicable to the facts of the present case, the present petitions succeeds and the Orders-in- Original referred to in the Chart at paragraph No. 3 hereinabove are quashed and set aside. In view of such decisions on merits, the show cause notices issued to the Petitioners would also not survive and consequent to the quashing of the Orders-in-Original, this Court is of the view that the show cause notices issued to the Petitioners must also be quashed. This Court additionally notes that the show cause notices were issued between 16.11.2010 and 28.03.2011 were eventually adjudicated on 21.09.2022 and 06.10.2022 i.e., after a gap of 11 and a half to 12 years. The aforesaid is a further reason to the decision in merits to hold that the show cause notices would not survive for further adjudication. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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