M/S. HANDLOOM ONLY Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s Handloom Only, is whether drawback of duty is available to them in respect of goods exported by them.

(2.) Shri A.C. Jain, Ld. Advocate, submitted that they filed 14 shipping bills all dt. 31.12.98 for export of 'ready to wear garments' under claim for drawback of duty; that the Customs Department alleged that the garments were highly over valued and no drawback claim was admissible; that solely on consideration of the fact that delay in export of goods would have entailed ejection of export order and since 40% of the value of the goods had been realised by way of advance, the appellants prayed, under their letter dt. 19.3.99, for immediate permission to export the consignment pending market enquiry; that no order was passed on their letter dt. 19.3.99; that therefore, neither they were asked nor did they convert the 14 drawback shipping bills into free shipping bills. He, therefore, mentioned that the Commissioner Customs, under Order -in -Original No. 16.99 dt. 9.4.99, confiscated the readymade garments with an option to redeem the same on payment of fine of Rs. 20 lakhs, imposed a penalty of Rs. 20 lakhs and ordered also that no drawback is admissible in terms of Section 76 of the Customs Act since the market value of the readymade garments was less than the amount of drawback; that on appeal, the Appellate Tribunal, vide Final Order No. 877/99 -A dt. 21.6.99 allowed the export of the consignment after drawing of the samples and remanded the matter to the Commissioner for going into valuation matter afresh based on objective criteria and for passing a reasoned order; that the Commissioner examined the matter afresh the impugned order No. 127/2000 dt. 18.12.2000 in which he gave the clear findings in para 13 that "the results of the market enquiries conducted on 7.1.2000 and 19.6.2000, evinced that the allegation advanced by the Department was hollow and could not hold as the market value of the impugned goods learnt from market sources, consignment -wise as well as cumulative -wise, was proved to be more than the amount of drawback claimed by the exporters"; that the Commissioner again in para 14 held that the declaration that local market value was more than the amount of drawback was found to be true and correct. He, therefore, contended that in view of this specific findings, provisions of Section 76(b) are not applicable.

(3.) THE Ld. Advocate, further submitted that the finding in the impugned order that the aspect relating to drawback was not covered by remand order is not correct; that the basis for withholding the shipment was the allegation of the Department that they were not eligible to get drawback as the value of goods was less than the amount of drawback; that the Commissioner in the earlier order has held that the drawback was not admissible in terms of Section 76 of the Customs Act; that the Tribunal permitted the export of the goods pending readjudication; that the Ld. DR also had no objection to the export being permitted pending detailed examination of the valuation of the goods and claim to drawback (Para 4 of Tribunal's Final Order No. 877/99 -A dt. 21.6.99). Finally he submitted that the finding in the impugned order that the claim of drawback lies settled in terms of their undertaking not to claim any drawback, is not correct at all; that letter dt. 19.3.99 only mentions that since market inquiry is pending, they undertake not to claim drawback for the consignment; that this letter was not considered as an undertaking by the Department at the time of passing Adjudication Order No. 16/99 dt. 9.4.99 as the then Commissioner disallowed Drawback on account of market value being less than the amount of drawback claimed; that further export was allowed by the Department under a Shipping Bill for Drawback; that in Bharat Commerce & Industries Ltd. vs. Collector of Customs, Bombay - 198 (93) ELT. 653 (SC), the Supreme Court held that "filing of a bill of entry in the prescribed form is not a procedural formality.....Section 46(5) contemplate substitution of one bill of entry by another. The second bill of entry must also be prepared and lodged with the proper officer in the prescribed form". He, further, contended that by allowing the export of goods under "drawback shipping bill", the Department cannot now claim that the goods were not shipped under the claim for drawback. He also relied upon the decision of the Bombay High Court in the case of Dunlop Rubber Co. (India)m Ltd. vs M.V. Raghvan Iyer, 1983 ELT. 2289 (Bom) wherein it was held that "it is well settled law that the validity of an impugned order must be judged by the reasons given in the order itself and cannot be complemented or supplemented by fresh reasons in the shape of an affidavit or otherwise".