2013 (7) TMI 571 - CGOVT - Customs

Recovery of Duty Drawback & Penalty Upheld for Export Violation

IN RE : AKS APPARELS

The government upheld the recovery of duty drawback amount of Rs. 4,00,801/- availed on exports by M/s. AKS Apparels, along with a penalty of Rs. 50,000/- ... Duty Drawback demanded – validity of notice – penalty - department contended that the goods procured from the traders did not accommodate the proforma prescribed under Boards Circular No. 54/2001 – Held that:- Drawback by providing wrong and incorrect information in Annexure I/II required to be furnished as per Drawback Circular No. 54/2001 – assessee mentioned the word supplier rather clearly stating the trader. As such they concealed this vital information from the department with motive to avail duty drawback of Central Excise portion - there was a suppression of facts the show cause notice was rightly issued invoking extended period clause and penalty is also rightly imposed on the applicant. Limitation of time barred – assessee’s contention of notice being time barred was also not sustained – revision application decided against assessee. Issues:Recovery of duty drawback amount | Interpretation of Circulars 54/2001-Cus. and 64/2001-Cus. | Applicability of Rule 16A of Customs and Central Excise Duty Drawback Rules, 1995 | Allegations under Section 75(1) of Customs Act, 1962 | Imposition of penalty | Time-barred Show Cause NoticeRecovery of duty drawback amount:The case involved an appeal by M/s. AKS Apparels against the recovery of duty drawback amounting to Rs. 4,00,801/- availed on exports. The issue arose due to the alleged incorrect information provided in Annexure-I/II as per Circulars 54/2001-Cus. and 64/2001-Cus., where the applicant procured goods from traders but did not declare the source of procurement correctly. The original authority confirmed the recovery and imposed a penalty of Rs. 50,000/- under Section 114 of the Customs Act, 1962.Interpretation of Circulars 54/2001-Cus. and 64/2001-Cus.:The applicant argued that Circular No. 16/2009 clarified that purchasing goods from traders in the open market did not lead to double benefits and, therefore, the interpretation in Circular No. 64/98-Cus. was incorrect. However, the government noted that the benefit of Circular No. 16/2009 could not be extended to past cases and that the applicant failed to comply with the conditions specified in Circulars 54/2001-Cus. and 64/2001-Cus.Applicability of Rule 16A of Customs and Central Excise Duty Drawback Rules, 1995:The applicant contended that Rule 16A did not apply since the export proceeds had been realized. However, the government observed that the violation of Circulars 54/2001-Cus. and 64/2001-Cus. led to the recovery of the duty drawback, irrespective of the realization of export proceeds.Allegations under Section 75(1) of Customs Act, 1962:The applicant argued that Section 75(1) did not apply as there were no allegations regarding the value of export goods compared to imported material used. The government found that the failure to declare the correct source of procurement constituted a suppression of facts, justifying the issuance of the show cause notice.Imposition of penalty:The applicant claimed that no illegal act was committed with mala fide intention, thus no penalty should be imposed. However, the government upheld the penalty due to the suppression of vital information by the applicant to avail the duty drawback.Time-barred Show Cause Notice:The applicant contended that the show cause notice was time-barred under Section 28(1)(b) of the Customs Act, 1962. The government justified the extended period clause invocation due to the suppression of facts by the applicant, leading to the issuance of the notice within the permissible time frame.The government, after careful review, upheld the impugned Order-in-Appeal, rejecting the revision application for lacking merit.