Drawback claims survive missing departmental records, with delayed payment attracting simple interest when the delay is attributable to the Department.
A drawback claim should not be defeated merely because the Department cannot trace its own records when export activity and entitlement are otherwise admitted, and the remaining dispute concerns only quantification; the claim was therefore upheld subject to verification. Where the delay in releasing the drawback payment was attributable to the Department's failure to preserve and process the records, simple interest was held payable as compensation, running from the date of the writ petition and fixed at 6% per annum until payment. The rejection of the balance drawback claim was set aside and payment directed with interest.
Issues: (i) Whether the petitioner was entitled to the balance drawback claim despite the Department's inability to trace the original records; (ii) Whether the petitioner was entitled to interest on the delayed payment, and from what date and at what rate.
Issue (i): Whether the petitioner was entitled to the balance drawback claim despite the Department's inability to trace the original records.
Analysis: The export activity was never disputed by the Department. The earlier writ proceedings had resulted in settlement of part of the claims, and the counter-affidavits filed in those proceedings substantially admitted the remaining claims, except where the Department had specifically objected and later the claim was settled. The Court held that the Department could not defeat a lawful drawback claim merely because its own records were not traceable, particularly when the petitioner had already produced the available documents and the dispute left for verification was only the quantum. The Department was therefore bound by its earlier admissions and was estopped from taking a contrary stand.
Conclusion: The petitioner was entitled to the drawback amount claimed, subject to the quantified verification ordered by the Court.
Issue (ii): Whether the petitioner was entitled to interest on the delayed payment, and from what date and at what rate.
Analysis: Since the petitioner had filed the original claim documents and the delay was attributable to the Department's failure to preserve and process the records, compensation for the delayed payment was held justified. Taking note of the long delay and the date of the writ petition challenging the rejection, the Court fixed the starting point of interest from the date of filing of the writ petition. For the rate, the Court adopted the then applicable statutory rate under the customs interest regime and fixed simple interest at 6%.
Conclusion: The petitioner was entitled to simple interest at 6% per annum from 31.07.2003 until payment.
Final Conclusion: The rejection of the balance drawback claim was set aside, and the respondents were directed to pay the quantified drawback amount with interest, thereby granting substantive relief to the petitioner.
Ratio Decidendi: A drawback claim cannot be rejected merely because the Department has misplaced its records when export and entitlement are otherwise admitted, and delayed statutory payment may attract interest where the delay is attributable to the Department.
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