Recovery - Rule 16A of DBK Rules already exists as S. 75 of CA, 1962
FROM 1991-1993, the appellant exported garments and were allowed duty drawback.
However, the appellant was not able to realise export proceeds of Rs.11.73 crores since the foreign buyers were declared bankrupt.
They informed RBI accordingly.
The customs authorities required the appellant to repay the duty drawback allowed earlier along with interest to the extent of the amount of sale proceeds not realised. The demand was confirmed.
The Appellate authority dismissed the appeal and the contention of the appellant that Rule 16A of the Duty Drawback Rules, 1995 was not retrospective was rejected. It was held that Rule 16A has to be harmoniously construed with the provisions of Section 75 of Customs Act, 1962, and therefore, recoveries can be effected in respect of exports made earlier and where foreign exchange has not been realized. It was further held that the drawback was not limited to customs duty but included duty on excisable goods as well.
In revision petition, the High Court held that Rule 16A of the Duty Drawback Rules, 1995 could not be retrospective and that all payments made towards the Central Excise component of drawback before 06.12.1995 [when rule 16A was inserted] cannot be recovered even though the export proceeds have not been realized.
Incidentally, prior to this, the appellant had deposited the entire sum of drawback with interest.
The Civil Appeal filed by the department was dismissed on the ground of delay.
And so the refund claim was filed.
The AC rejected the claim to the extent of its customs component of Rs.46,06,890/- and also the claim for interest.
The High Court partly allowed the Writ Petition by directing the department to pay the appellant interest for the delayed refund of the excise duty component at the rate of 12% p.a. The claim for refund of the customs component of the drawback together with interest was rejected.
The Supreme Court has upheld this order.