1993 (9) TMI 109 - HC - Customs

Court rules petitioners entitled to duty drawback post rate determination. Overturns rejection, directs interest payment.

The court ruled in favor of the petitioners, holding that they were entitled to claim duty drawback only after rates were officially determined. The ... Drawback - Interest on delayed payment Issues:1. Duty drawback rates for export of Nylon Tyres2. Rejection of duty drawback claim by Assistant Collector of Customs3. Time-barred appeal and revision applicationAnalysis:Issue 1: Duty drawback rates for export of Nylon TyresThe petitioners, engaged in the business of manufacturing and exporting tyres, sought duty drawback rates for their exports to Pakistan in 1978-79. They were entitled to drawback under Sections 74 and 75 of the Customs Act, 1962. The rates for 1978 were fixed by the Ministry of Finance in February 1979. Subsequently, the petitioners applied for rates for 1979, providing necessary details. The rates for the period 1-1-1979 to 31-3-1980 were communicated to the petitioners in January 1981. The petitioners claimed duty drawback for exports in February/March 1979, once the rates were fixed, which was rejected by the Assistant Collector of Customs. The court held that the delay in fixing rates was not the petitioners' fault, and they were entitled to claim duty drawback only after rates were determined. The rejection by the Assistant Collector was deemed incorrect, and the petitioners' claim was upheld.Issue 2: Rejection of duty drawback claim by Assistant Collector of CustomsThe Assistant Collector rejected the petitioners' duty drawback claim for exports in February/March 1979, citing the pending status of the rates. The petitioners had requested to keep the claims pending until rates were fixed, which was ignored. The rejection led the petitioners to file an appeal and a revision application, both of which were dismissed as time-barred. The court found the rejection premature and unjustified, as the rates were only finalized in January 1981. The Assistant Collector's directive to file an appeal was untimely, resulting in the dismissal of subsequent appeals. The court ruled in favor of the petitioners, emphasizing their entitlement to duty drawback and the incorrect handling of the case by the Assistant Collector.Issue 3: Time-barred appeal and revision applicationThe dismissal of the petitioners' appeal and revision application was based on the grounds of being time-barred. The rejection of their duty drawback claim by the Assistant Collector led to a series of procedural hurdles for the petitioners. Despite their timely communication and subsequent actions, the rejection and subsequent dismissals were deemed unjust due to the Assistant Collector's premature decision. The court allowed the petition, directing the respondents to pay interest to the petitioners at a rate of 12% per annum from 1-4-1981 until payment, along with costs of the petition. The court highlighted the petitioners' promptness in claiming duty drawback post the finalization of rates, emphasizing their rightful entitlement to the same.This comprehensive analysis of the judgment highlights the issues of duty drawback rates, rejection of claim by the Assistant Collector, and the time-barred appeals and revision applications, elucidating the court's findings and rulings in favor of the petitioners.