VAMADEV EXPORTS Vs. THE COMMISSIONER (APPEALS)

JUDGEMENT

(1.) IT is the claim of the petitioner that the petitioner Company, being 100% export oriented unit, had imported 6 auto striper knitting machines for a sum of Rs. 51,48,414/ - under the Export Promotion Capital Goods (EPCG) Scheme, which has been notified by the Government of India vide its Customs Notification No. 28/97. It is stated that the said scheme provided for Zero duty / Concessional duty for capital goods imported into the country with the object of promoting export trade from India, therefore, the petitioner, in order to avail such duty, had obtained a license bearing number P/CG/2141847/C/X//45/MC/97, dated 03.09.1997, from the Director General of Foreign Trade (DGFT), which is Regional Authority / Licensing Authority under the Scheme. As per the procedure under the Scheme, the Regional Authority / Licensing Authority issues a license with certain conditions wherein the exporter is required to undertake export obligation. Likewise, in the present case, the petitioner was stipulated to fulfil an export obligation of USD 7,39,969/ -. Based on the said scheme, the total duty saved for the import of the aforesaid machines came to be Rs. 7,57,105/ -, therefore, as per the said scheme, the petitioner importer is required to furnish a Bank guarantee in favour of the Commissioner of Customs, Chennai, totalling 100% value of the duty saved portion. Accordingly, the petitioner had also furnished a Bank Guarantee bearing Number 97/44 in favour of the respondent for a sum of Rs. 7,58,000/ - pertaining to the duty saved portion under the license and that the said Bank guarantee was issued by M/s. Indusind Bank Limited, Avinashi Branch, for the period from 01.12.1997 to 01.12.2002. However, the respondent, vide its letter dated 26.12.2000, to M/s. Indusind Bank Limited, invoked a partial sum of Rs. 4,07,245/ - towards duty and interest from the bond / guarantee stating that the petitioner had failed to fulfil pro -rata export obligation in the customs notification. Thereafter, the said Bank by letter dated 05.01.2001 paid the said amount demanded by way of demand draft in favour of the Commissioner of Customs (Airport) Chennai. However, since the petitioner had fulfilled its total export obligations and obtained the necessary export obligation discharge certificate (EODC) which was issued by the DGFT on 26.05.2003, wherein a sum of USD 8,14,639 had been fulfilled by the petitioner, which is over and above the stipulated sum as per the said license, on receipt of such details, the petitioner had immediately, vide their letter dated 28.05.2003, requested the Commissioner of Customs, Rajaji Salai, Chennai, to release the original bank guarantee in their custody. Thereupon, the said original bank guarantee was released by the Customs department with the 'cancelled endorsement' much later by its letter dated 22.03.2007. On receipt of original bank guarantee, though the petitioner had made an application for refund of duty on 10.04.2007 for return of the enforced sum of Rs. 4,07,245/ -, that has been paid by the petitioner's bankers M/s. Indusind Bank on 05.01.2001, the Deputy Commissioner of Customs, without providing an opportunity of personal hearing to the petitioner, dismissed the appeal in his Order -in -Original No. 304/2007 DC (Acc), dated 20.08.2007 stating that the refund application has been filed beyond the limited period of six months as stipulated in Section 27 of the Customs Act. As against that, though the petitioner filed an appeal before the respondent on 09.10.2007, they did not get any information from the respondent, therefore, the petitioner was constrained to file an application under the RTI Act to know the status of his appeal pending before the respondent. Thereafter, the RTI department of the Customs House, vide its letter dated 21.05.2014, replied stating that the appeal had been disposed of vide Order -in -Appeal in C.Cus No. 1315/2009, dated 04.11.2009, and only thereafter, on receipt of such information, the petitioner came to know the status of his appeal preferred before the respondent.

(2.) IT is further submitted that the respondent ought to have seen that Section 27 of the Customs Act, 1962 and the provision of six months limitation contained thereon is not at all applicable to a case of an enforced Bank guarantee, for, the said sum of Rs. 4,07,245/ - had not been paid by the petitioner, but, the same was taken by the department under enforcement of the submitted Bank guarantee, which was given as a security, therefore, had the respondent provided an opportunity of personal hearing, the petitioner would have appeared in person and would have explained everything, but, since such procedure was not followed, the present impugned order is liable to be set aside.

(3.) PER contra, learned counsel appearing for the respondent urged this Court to dismiss the writ petition, as they cannot come to this Court by filing writ petition when they have got an appeal remedy before the CESTAT as per Section 129 -A of the Customs Act. It is further submitted that when the petitioner got the export obligation discharge certificate issued by the DGFT on 26.05.2003, the petitioner, with a huge delay of four years, moved an application for refund of Rs. 4,07,245/ - only on 10.04.2007, therefore, the original authority, vide its order dated 20.08.2007, rejected the claim for refund on the ground that the application filed by the petitioner was beyond six months period stipulated. As against that, when appeal was filed, the appellate authority also rejected the claim of the petitioner. It is further submitted that the agreed amount of target by the petitioner was not achieved by them in the second block year, hence, a sum of Rs. 4,07,245/ - was encashed on 10.01.2001 in terms of the condition of the contract. It is further stated that although the petitioner obtained Export Obligation Discharge Certificate (EODC) and the same was submitted on 26.05.2003, pursuant to the filing of EODC, the petitioner sought for refund of encashed bank guarantee, therefore, it was rejected by the authority in the light of Section 27 of the Customs Act, hence, he sought for no interference to the order passed by the respondent.