2022 (7) TMI 665 - HC - Customs

Writ petition for removal of 'Risky Exporter' tag denied; relief request rejected; directives issued

The court denied interim relief in a writ petition seeking removal of the 'Risky Exporter' tag, duty drawback, and IGST refund. The appellant's request ... Violation of principles of natural justice - removal of “Risky Exporter” Tag from the Indian Customs, EDI System - Seeking to grant the pending duty drawback under the provisions of the Customs Act, 1962 as well as the pending refund of Integrated Credit Goods and Service Tax (IGST) - compensation for the delay in granting refund of duty drawback - compensation for the delay in the refund of IGST - HELD THAT:- It not possible to proceed on the basis of assumptions and presumptions since as of now, the only allegation against the petitioner is that few of the suppliers are suspected suppliers. The 3rd respondent Department directed the petitioner to reverse the credit availed by them alleging that the suppliers are nonexisting suppliers. This demand made by the Department has been complied with by the petitioner. Therefore, it will not augur well to continue the brand of the petitioner as a “Risky Exporter” in the absence of fresh material available on record. In any event, the tag which has been fastened to the EDI System pertaining to the petitioner as a “Risky Exporter” has been done without notice to the petitioner. Therefore, if there is any other material, it will be open to the respondents including the 2nd respondent to put the petitioner on notice and take appropriate action in accordance with law. The petitioner apart from seeking for removing the “Risky Exporter” tag also seeks for a positive direction to grant the pending duty drawback under the provisions of the Customs Act and also grant the refund of the IGST. At this juncture, no such positive direction can be issued to the authorities but the authorities are bound to take action in accordance with law. If, in the opinion of the authority, for some valid reasons, there is doubt as to the entitlement, then the petitioner has to be put on notice and an opportunity has to be granted to the petitioner. The competent authority of the 2nd respondent Department is directed to lift/remove the “Risky Exporter” tag affixed in the Indian Customs, EDI System concerning the petitioner within three weeks from the date of receipt of the server copy of this order - application disposed off. Issues:Interim relief denied in a writ petition seeking removal of 'Risky Exporter' tag, duty drawback, and IGST refund.Analysis:The appellant filed a writ petition seeking various reliefs, including the removal of the 'Risky Exporter' tag, duty drawback under the Customs Act, and refund of IGST. The court noted that granting interim relief tantamounts to providing the main relief at an interlocutory stage, which is impermissible. The court, therefore, decided to dispose of the writ petition and the appeal as agreed by both parties.The appellant was branded a 'Risky Exporter' due to suspicions regarding their suppliers. The communication from the 3rd respondent highlighted the issue, stating that the appellant's suppliers were suspected, leading to scrutiny of ITC availment. The appellant complied by reversing the ITC credit and paying the penalty, requesting the removal of the tag. The court acknowledged procedural infirmities raised by the appellant but deemed it unnecessary to delve into the relief entitlement at that stage.The respondents argued that the appellant's actions implied acceptance of the charges, and it was the 2nd respondent's duty to remove the tag. The court emphasized the need for fresh material to sustain the 'Risky Exporter' label and highlighted the lack of notice to the appellant before tagging. It was suggested that any further action should be taken in accordance with the law.Regarding duty drawback and IGST refund, the court directed the authorities to process the claims within three weeks of the order, providing notice to the appellant if doubts arise about entitlement. The court aimed to balance revenue interests and the appellant's relief, ensuring a fair opportunity for the appellant in case of doubts.In conclusion, the court directed the removal of the 'Risky Exporter' tag within three weeks and instructed processing of duty drawback and IGST refund claims with notice to the appellant if necessary. No costs were awarded, and the related application was also disposed of.