Can an assessee file declaration for Drawback later on after clearance of the goods for export from the port without any such reasons which are under his control ?

PJ/Case Law/2014-15/2368

Case:-COMMSIIOSNER OF CUSTOMS, VISAKHAPATNAM Versus CARGIL INDIA PVT. LTD.

Citation:-2014 (299) E.L.T. 290 (A.P.)

Brief fact:- This appeal is directed against an order dated 23-12-2009 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore in appeal No. C/81/2009 [2010 (258) E.L.T. 298 (Tribunal)].
The assessee had filed 14 shipping Bills for export of soyabean meal through Visakhapatnam Port to Vietnam and Japan. The shipping bills were filed between 8-11-2007 and 23-1-2008. 3. While filing the shipping bills, the assessee did not claim any draw-back of duty under the Customs, Central Excise Duties and Service Tax Draw-back Rules, 1995 (for short 'the Rules'). In other words, the assessee filed free shipping bills for export. 4. Much later, on 6-8-2008 the assessee made an application to the Commissioner of Customs for converting the free shipping bills into drawback shipping bills. During the course of submissions before the Commissioner in this regards reliance was placed by the assessee on Rule 12(1)(a) of the Rules. This Rule reads as under:
"RULE 12. Statement/Declaration to be made on exports other than by Post.– (1) In the case of exports other than by post, the exporters shall at the time of export of the goods:
(a)   state on the shipping bill or bill of export, the description, quantity and such other particulars as are necessary for deciding whether the goods are entitled to drawback, and if so, at what rate or rates and make a declaration on the relevant shipping bill or bill of export that - .
(i)            a claim for drawback under these rules is being made;

(ii)           in respect of duties of Customs and Central Excise paid on the containers, packing materials and materials and the service tax paid on the input services used in the manufacture of the export goods on which drawback is being claimed, no separate claim for rebate of duty or service tax under the Central Excise Rules, 2002 or any other law has been or will be made to the Central Excise authorities :
Provided that if the Commissioner of Customs is satisfied that the exporter or his authorized agent has, for reasons beyond his control , failed to comply with the provisions of this clause, he may, after considering the representation, if any, made by such exporter or his authorized agent, and for reasons to be recorded, exempt such exporter or his authorized agent from the provisions of this clause."

The Commissioner considered the request of the assessee and came to the conclusion by his order dated 24-10-2008 that the assessee had not been able to give any explanation "for reasons beyond his. Control "for not making a drawback claim at the time of filing the shipping bills. The Commissioner also relied upon Circular No. 4/2004, dated 16-1-2004 issued by the Central Board of Excise and Customs which stated that the Commissioner may examine and consider individual requests on merits and facts. Applying the provisions of the circular, the Commissioner came to the conclusion that since the goods had been exported and were not subject to any physical examination, the request for converting the free shipping bills into drawback shipping bills could not be acceded to. Under the circumstances, the claim of the assessee was rejected by the Commissioner. Feeling aggrieved, the assessee preferred an appeal before the Tribunal and that appeal was allowed by the order under challenge.

Appellant’s contention:-

Respondent’s contention:-

Reasoning of judgment:- They have heard learned counsel for the parties and are of the opinion that the following substantial question of law arises for consideration :-
“Whether on the facts and in the circumstances of the case, the Customs, Excise and Service Tax Appellate Tribunal was justified in law in allowing the assessee to convert the free shipping bills into drawback shipping bills notwithstanding the provisions of Rule 12(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995?”
In their opinion, the answer to the aforesaid substantial question of law must be in the negative, in favour of the Revenue and against the assessee.
A plain reading of the Rules, particularly Rule 12(1)(a) makes it very clear that conversion of a free shipping bill can be allowed into a drawback shipping bill only if the assessee is able to satisfy the Commissioner that "for reasons beyond his control", drawback was not claimed. In the instant case, there is nothing on record to suggest that the claim for duty drawback was beyond the control of the assessee. All that has been stated by the assessee is that it was not aware of the correct legal position and, therefore, it did not make the claim for duty drawback in the first instance.
Apart from the fact that the aforesaid explanation is not satisfactory, Theyfind that the assessee did not make any claim for duty drawback for as many as eight months even after the shipping bills were filed. It is quite clear that the assessee made the claim for duty drawback only as an afterthought. There were no reasons beyond its control for making the claim for duty drawback earlier.
In view of the above, in their opinion, the Tribunal was in error in allowing the appeal filed by the assessee and directing the conversion of the free shipping bills filed by the assessee into drawback shipping bills. It is also submitted by learned Senior Counsel for the assessee that even otherwise, the assessee has a right to have the free shipping bills converted into drawback shipping bills. They cannot agree with this submission for the simple reason that Rule 12(1)(a) of the Rules provides that conversion is permissible only if the assessee is able to give satisfactory reasons to suggest that at the initial stage, duty drawback was not claimed for reasons beyond its control. The assessee has not been able to furnish any such reason and, therefore, Theyare not inclined to accept the submission made in this regard by learned Senior Counsel for the assessee. Under the circumstances, the order passed by the Tribunal is aside and the appeal filed by the Revenue is allowed. The miscellaneous application is also disposed of.

Decision:-Appeal allowed.

Comment:- The law is very clear on the terms of claiming the drawback once the export has been done. It clearly states that an assessee can convert the free shipping bill into a drawback shipping bill only if he is able to convince the designated authority that the drawback claim was not filed due to reasons beyond his control. In this particular case, the assessee was not able to prove the same and thus he was rightly denied the drawback claim.

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PJ/Case Law/2014-15/2368

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