COMMISSIONER OF CUSTOMS Vs. KULTAR EXPORT

JUDGEMENT

(1.) CAV.739/2012

(2.) Brief facts necessary to decide the case are that the respondent is in the business of readymade garments and textiles. It purchases these export items from various traders and exports them. On the basis of an existing scheme, it claims duty drawback on the inputs required for the manufacture of such items at drawback rates notified by the Central Government (also known as 'All Industry Rates'). These rates have two components i.e. customs duty element and another, excise duty component.

(3.) For the period 2003-2004 to 2006-2007, the respondent exported garments and textiles against 326 shipping bills with FOB value of Rs.90,32,98,529/-. It claimed Central Excise portion of duty drawback to the extent of Rs.1,43,15,400/- . The appellant alleged that during the course of investigation based upon the vigilance report it became aware that the respondent had fraudulently obtained inadmissible drawback of the Customs duty component of duty and that it had failed to provide copies of shipping bills and related documents. Consequently, the Commissioner of Customs issued a show cause notice on 9 th September, 2008 demanding a sum of Rs.1,43,15,400/- under Section 75 of the Customs Act, 1962. The show cause notice alleged that the procedure applicable and spelt out in a Circular No.44/2001 had not been complied with. The respondent replied, inter-alia, stating that the demand pertained to a period beyond five years and was time barred. It was also urged that the drawback claimed and admitted was in accordance with the procedure and formalities prescribed under the Customs and Central Excise Drawback Rules, 1995. A declaration in terms of Rule 12 of the Rules was made by the respondent on the shipping bills that no drawback claim for rebate of duty has been sought in respect of the Customs and Central Excise duty paid on materials, containers etc. The respondent also alleged that they had given a declaration that no CENVAT Credit had been allowed on exported goods. The reply to the show cause notice also stated that Circular No.8/2003 (dated 17 th February, 2003) had been complied with as the same was in force and that being a merchant exporter, a self-declaration that no CENVAT Credit was claimed was sufficient to enable the duty drawback.