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of <h1>Court quashes duty drawback demands, sets 5-year limit for notices</h1> <h3>Zee Knits & Weaves Pvt. Ltd And Anr., Worldwide Tradelinks And Anr. And M/s Famina Knit Fabs And Anr. Versus Union of India And Ors.</h3> Zee Knits & Weaves Pvt. Ltd And Anr., Worldwide Tradelinks And Anr. And M/s Famina Knit Fabs And Anr. Versus Union of India And Ors. - TMI Issues involved:1. Quashing of order-in-original rejecting declared Free on Board (FOB) value of exported goods and demanding recovery of drawback disbursed post-export under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995.2. Reasonable period of limitation to issue show cause notice.3. Effect of repeal of Duty Drawback Rules 1995.4. Absence of mechanism to raise demand of duty drawback.5. Power of Respondent to reassess value of goods already exported.Analysis:Issue 1: Quashing of order-in-originalThe judgment addresses three Civil Writ Petitions seeking the quashing of the order-in-original rejecting the FOB value of goods exported and demanding recovery of drawback disbursed post-export under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. The Petitioners exported goods during specific periods, claimed duty drawback, and were later alleged to have overvalued the goods. The Directorate of Revenue Intelligence (DRI) initiated an investigation, leading to the issuance of Show Cause Notices. The Respondent upheld the reduced FOB value, confirmed the demand of duty drawback, and imposed penalties. The Court considered the issues raised in previous judgments and concluded that the writ petitions were maintainable due to the involvement of pure questions of law.Issue 2: Reasonable period of limitationThe Court determined that a period of 5 years from the date of export/assessment is a reasonable limitation period to issue show cause notices for raising demands of duty drawback. Citing relevant judgments, the Court established the legal framework for determining the reasonable period within which such notices must be issued.Issue 3: Effect of repeal of Duty Drawback Rules 1995The judgment clarified that after the repeal of Duty Drawback Rules 1995, any show cause notice invoking Rule 16 of the repealed rules issued after 1.10.2017 is not sustainable. The Court relied on specific legal provisions and precedents to support this conclusion.Issue 4: Absence of mechanism to raise demand of duty drawbackThe Court held that the mechanism for raising demands under Rule 16 of the Duty Drawback Rules, 1995 was absent, making such demands unsustainable. Citing relevant sections of the Customs Act and previous judgments, the Court established the legal basis for this finding.Issue 5: Power of Respondent to reassess value of goodsThe judgment clarified that the Respondent does not have the power to reassess the value of goods already exported, based on the law laid down by the Hon'ble Supreme Court and relevant precedents. The Court's decision was influenced by recent legal developments and established principles regarding the reassessment of exported goods.In conclusion, the Court allowed all three writ petitions, quashing the impugned orders-in-original and providing detailed legal reasoning for each issue raised by the Petitioners.
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