SURINDER SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition challenges an order dated 12.6.2003 passed by the Assistant Commissioner of Customs (Refund) rejecting the claim for refund of the drawback recovered from the petitioner to the extent of its customs component of Rs.46,06,890. The petitioner"s claim for interest at 24% on the entire amount of the drawback recovered from the petitioner (on both excise and customs components) was also rejected by the impugned order.

(2.) The petitioner is the sole proprietor of M/s. Rangi International and is carrying on the business of manufacture and export of readymade garments. During 1991-1993, the petitioner exported garments to M/s. Pinky Originals Inc. and M/s. Indo American Design Workshop Inc. USA valued at Rs.45.75 crores, in respect of which the petitioner was allowed duty drawback. However, the petitioner was not able to realise export proceeds to the extent of Rs. 11.73 crores since the foreign buyers were declared bankrupt. Consequently, the petitioner applied to the Reserve Bank of India (RBI) to write off the amount, as there was no possibility of realising the aforementioned export proceeds. The RBI granted the petitioner the permission subject to certain terms which the petitioner claims to have complied with.

(3.) By a notice dated 17.11.1997, the Customs Authorities in Delhi (Air Cargo Unit), required the petitioner to surrender/repay the duty drawback allowed earlier to the extent of the amount of sale proceeds not realised. After receiving the reply of the petitioner, the Assistant Commissioner of Customs by an order dated 1.7.1998 confirmed the demand of Rs.99,69,684 towards principal, along with interest at the rate of 24% per annum amounting to Rs.71,73,851, aggregating to Rs.1,71,37,545/-. It is not in dispute that the interest component has been worked out at 24 per cent per annum for a three-year period between 26.5.1995 and 26.5.1998.