NEW PENSLA INDUSTRIES Vs. UNION OF INDIA

JUDGEMENT

(1.) Being aggrieved by the deficiency memo issued by the third respondent - Deputy Commissioner of Customs (Drawback), Mundra, the petitioner has presented this petition under Article 226 of the Constitution of India.

(2.) The petitioner, a proprietary concern, manufactures engineering goods, viz., nuts, bolts, hand tools, etc. and is also engaged in the activity of export of such manufactured goods. In the usual course of its business, the petitioner exported fully threaded rods, pickaxes, hoes, nut bolts, washers and steel clamps, etc. during the period from September 2012 to 31-12-2014, whereby approximately 150 transactions of exports have been undertaken and the said goods have been exported to various places, such as, Saudi Arabia, UAE, Kuwait, Jordan, etc. It is the case of the petitioner that under the provisions of the Customs Act, 1962 (hereinafter referred to as "the Act"), an exporter who seeks clearance for export of goods has to file shipping bill in terms of the provisions of Section 50 of the Act before the Customs Officer. The Customs Officer permits clearance and loading of goods for exportation after being satisfied that the goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon as per Section 51 of the Act. It is the case of the petitioner that the said goods have been cleared and the export transaction has been completed, that is, the goods have also been received by the importer. It is further the case of the petitioner that the goods have been cleared by issuing Let Export Order under Section 51 of the Act after the Proper Officer has assessed the goods under different chapter headings on which the goods have been classified and the classification made by the petitioner has been accepted by the Proper Officer and the goods have been cleared after an appropriate order under Section 51 of the Act has been passed. Moreover, even an export promotion copy has been issued by the customs authorities, which according to the petitioner is the final and conclusive proof to show that the assessment under Section 17 of the Act has been undertaken and the Let Export Order has been issued under Section 51 by the Proper Officer. According to the petitioner, it is only on production of export promotion copy that the exporter would be entitled to the benefits of incentives of export, such as, duty drawback and such other incentives, such as, Focus Product Scheme (FPS), which is under the Foreign Trade Policy of the Union of India.

(3.) The petitioner submitted claims for drawback for the respective export transactions within the prescribed time, however, the same were not cleared or processed. It appears that various queries were raised in that regard, which according to the petitioner were baseless queries just to delay the drawback claims for extraneous considerations. Since its requests were being ignored, it appears that the petitioner made a complaint dated 29-9-2015 to the Chairman, Central Board of Excise and Customs, whereby the petitioner had complained that it was only because their illegal demands were not met by the petitioner, that the drawback had been withheld. Copies of the said complaints were also marked to the Director General of Vigilance, Customs and Central Excise, New Delhi and to the Chief Commissioner of Customs, Mundra. It is further the case of the petitioner that it had made a specific complaint to Vigilance Department with regard to one drawback claim bearing shipping bill No. 6263162, dated 25-11-2014 and that immediately upon receipt of the complaint, the said drawback was processed and the principal amount of drawback was released. However, in respect of other export transactions bearing shipping bills No. 6405445, dated 11-7-2013, No. 6404623, dated 11-7-2013, No. 3797176, dated 10-7-2014, No. 5224360, dated 26-9-2014, No. 5584613, dated 11-10-2014, No. 6117017, dated 18-11-2014 and No. 6263664, dated 25-11-2014, wherein similar queries were raised, i.e. with regard to wrong classification of goods, after the petitioner lodged the complaint, the drawback came to be released by the department on 9-11-2015 and 20-11-2015, but, without interest, by accepting the classification of the goods as made by the petitioner. It is the case of the petitioner that in respect of similar type of goods and similar queries, the department had accepted the classification of the petitioner and had released the drawback, however, with regard to other export transactions, the drawback claims have not been processed and are not released. Subsequently, the impugned deficiency memo has been issued stating that the department does not agree with the classification and self-assessment of the exported goods as made by the petitioner and that the items exported by the petitioner as detailed therein are nothing but part of main products of scaffolding, that is, temporary structure used to support people and material in construction and repair or building and other structure and more appropriately classifiable under Chapter 7308 40 00, and calling upon the petitioner to show cause as to why the exported goods referred to therein should not be classified under CTH and sub-heading thereof and drawback be restricted accordingly, which has given rise to the present petition.