Customs | Drawback Cannot Be Denied On Grounds Of Alleged Forgery By Foreign Buyer Once Goods Are Exported: CESTAT

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that drawback cannot be denied on the grounds of alleged forgery by a foreign buyer after goods are exported under the Customs & Central Excise Duties Drawback Rules 1995. The single bench consists of (Judicial Member) opined that any forgery, if revealed during a further investigation being committed by the Russian company vis-a-vis the Landing certificate in the light of Drawback Rules in India, is highly insufficient to deny the claim of drawback, specifically when the goods have crossed Indian territory and to reach to a place outside India. In this case, the assessee/appellants had made 29 export shipments of children's garments through ICD, Tuglakabad, New Delhi, and 9 export shipments of ladies' garments through Mumbai Customs House. From the show cause notice, it was observed that 9 containers shipped by Texcomash Export from Delhi to Moscow were to be taken delivery in Dubai itself on surrendering the original bills of landing by the party concerned. During the course of examination of goods at the time of export, the proper officer formed the opinion that the goods had been highly over-invoiced with the intention of claiming an inflated amount of drawback. Though the export was allowed provisionally but the market enquiries were conducted. Assistant Collector of Customs, ICD, passed the assessment order reducing the value of Rs. 210/- per set for the purpose of drawback. The assessee had filed an appeal against the assessee. However, the Collector (Appeals), New Delhi, rejected the appeals. The issue before the Tribunal was whether the assessee is entitled to claim drawback in respect of 9 shipments of ladies' garments which did not reach Russia. The bench noted that the moment any good is taken to a place outside India, it amounts to export, and the exporter is allowed to get the refund of duty paid on importation of such goods in the form of drawback. No rider in the entire drawback rules is found with respect to any condition, including that of Circular No. 30/1993 dated 28.09.1993. There is no denial on the part of the department that the remittances were received by the assessee. Had Circular No. 30/1993 been binding in case of no third country exports, the RBI would not have released the remittance in Indian rupees out of the state credit funds. This observation is sufficient to falsify the findings in the impugned order in the original, stated the Tribunal. The bench found that there was a landing certificate issued with respect to these consignments, as well as too from the Russian company. The Tribunal opined that the reliance on Rule 16A of the Customs & Central Excise Duties Drawback Rules 1995 is also not appropriate. The bench further opined that the provisions do not have any retrospective effect. The exports in question were made at a time prior those rules came into effect. Hence, denying drawback invoking the Rule 1995 to the export of the year 1993-94 is otherwise not legally permissible. The bench held that the assessee is entitled to the said amount of drawback on 9 consignments of ladies' garments exported by the assessee to a place outside India. In view of the above, the Tribunal allowed the appeal. Case Title: M/s Texcomash Export & Sh. N.K. Rajgarhia v. Commissioner of Customs, New Delhi Case Number: Customs Appeal No. 724 of 2005 Counsel for Appellant/ Assessee: A.K. Jain Counsel for Respondent/ Department: Rohit Issar Click Here To Read/Download The Order

Customs | Drawback Cannot Be Denied On Grounds Of Alleged Forgery By Foreign Buyer Once Goods Are Exported: CESTAT

Mehak Dhiman

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