PADMINI EXPORTS Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India, the petitioners have challenged the Order-in-Appeal No. 285/2003 (102-AHD) Cus/Comm(A)/AHD/ dated 22-9-2003 passed by the Commissioner of Customs (Appeals), Ahmedabad, whereby the appeal preferred by the petitioners has been dismissed for non-compliance with the provisions of Section 129E of the Customs Act, 1962. The petitioner firm is engaged in various business activities including export of fabrics made from 100% polyester filament yarn. The Central Government in exercise of powers conferred by Section 75 of the Customs Act, 1962 and Section 37 of the Central Excise Act, 1944, has framed the Rules called the Customs & Central Excise Duties Drawback Rules, 1995 (hereinafter referred to as "the Drawback Rules") whereunder, the Central Government is given power to fix rates at which drawback would be allowed to exporters of specified goods. Sub-Serial No. 54.04 of the Drawback Schedule covered goods of the description, "all fabrics including sarees, dhotis and odhanies made of man-made staple fibers and filament yarn". The goods exported by the petitioners are admittedly covered under SS No. 5404 of the Drawback Schedule and therefore, the petitioners were eligible for drawback thereunder. The rate of 20% of F.O.B. (Free on Board) value subject to a maximum of 62 per kg of filament yarn content was prescribed under the above schedule, subject to certain conditions. If those conditions were not satisfied by the exporter, then drawback at the rate of 17% of FOB value was allowed.

(2.) The petitioners exported various consignments of the goods falling under SH No. 5404 during the period from December 1995 to May 1996 under the claim of drawback. The petitioners filed claims for drawback for all such exports before the third respondent who was competent officer for verifying and sanctioning the claims of drawback for exporters of Surat. It is an undisputed fact that all these drawback claims were duly scrutinized, verified and thereafter, sanctioned by the third respondent by August 1996 and the amounts of drawback were also disbursed and paid by August 1996.

(3.) The petitioners' claim was at the rate of 17% F.O.B. value because the petitioners did not satisfy condition (b) of the Drawback Schedule and fell within the ambit of condition (c) inserted vide second public notice dated 1-8-1995. It may be noted that subsequently, various communications came to be issued by the Drawback Commissioner clarifying that the maximum limit of Rs. 62/- per kg of filament yarn content would also apply to the cases covered under Note (c) of the Drawback Schedule. However, it was stated that the same would be applicable to pending cases only.