Company settles duty drawback claim, admits error, pays Rs. 31,11,173, granted immunity from penalties.

The case involved M/s. Mccoy Clothing admitting to inadvertently claiming ineligible duty drawback under the Customs Act. They cooperated, made payments, and sought settlement for duty liability amounting to Rs. 31,11,173. The Bench granted immunity from interest, penalty, and prosecution, provided full disclosure was maintained. The settlement was made under Section 127C(1) of the Customs Act, with immunities granted under Section 127H(1), subject to compliance with specified provisions.

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Issues:
Settlement of duty drawback amount claimed in Show Cause Notices under Customs Act, 1962.

Analysis:
The case involved M/s. Mccoy Clothing filing four applications under Section 127B of the Customs Act, 1962, for settlement of duty drawback demanded in Show Cause Notices issued by different adjudicating authorities. The SCNs proposed penalties, fines, and interest under the Customs Act for claiming ineligible duty drawback. The applicant admitted to procuring cotton yarn duty-free under Rule 19(2) of the Central Excise Rules, using it in exported garments, unknowingly claiming ineligible duty drawback. They made payments upon realizing the error, leading to a request for Admission-cum-Final hearing.

During the hearing, the applicant's representative explained the lack of understanding that led to the wrong availment of duty drawback. The Revenue representatives did not object to converting the proceeding into Admission-cum-Final Hearing. The Bench noted the applicant's full disclosure, cooperation, and payments made, acknowledging their admission of duty liability and cooperation with the Commission. The Revenue was tasked with reconciling certain payments made by the applicant to their sister concern.

The Bench admitted the case under Section 127C(1) of the Customs Act, settling the duty liability at Rs. 31,11,173. M/s. Mccoy Clothing was granted immunity from interest, penalty, and prosecution under the Customs Act. The settlement would be void if any material particulars were withheld or false evidence provided. Immunities were granted under Section 127H(1) of the Customs Act, with attention drawn to sub-sections (2) & (3) of Section 127H.

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