Brand rate drawback withdrawal sustained where claimant failed to prove actual entitlement and showed no prejudice from later verification.

Withdrawal of brand rate drawback was examined on two grounds: alleged breach of natural justice and merits under writ jurisdiction. The Court found no prejudice from non-supply of the re-verification report because the claimant had earlier opportunities to respond, had filed objections, and later filed an affidavit after receiving the report. On merits, drawback depended on proof of actual duty suffered and proper verification of inputs used in exported goods; the record, including the re-verification report, supported the view that the claims were inflated or unsubstantiated. The writ court declined fresh minute scrutiny of accounting entries and sustained the departmental withdrawal.

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Issues: (i) Whether non-supply of the re-verification report and the alleged absence of a full hearing vitiated the withdrawal of brand rate drawback on the ground of breach of natural justice; (ii) Whether the withdrawal of the brand rate drawback was unsustainable on merits in a writ proceeding under Article 226 of the Constitution of India.

Issue (i): Whether non-supply of the re-verification report and the alleged absence of a full hearing vitiated the withdrawal of brand rate drawback on the ground of breach of natural justice.

Analysis: The re-verification exercise was treated as a subsequent checking process undertaken after withdrawal had already been ordered, and the record showed that the appellant had been given opportunities at different stages to meet the material relied upon. The entries in the annexures to the report had been noticed by the appellant, objections were filed, and a further affidavit was also filed after supply of the report pursuant to the earlier direction. The Court held that no prejudice was shown from the alleged non-supply, particularly when the report was a later verification of the department's earlier action and the appellant had been able to respond to the substance of the objections.

Conclusion: The plea of violation of natural justice failed and was against the appellant.

Issue (ii): Whether the withdrawal of the brand rate drawback was unsustainable on merits in a writ proceeding under Article 226 of the Constitution of India.

Analysis: The Court held that the grant of drawback depended on proof of actual duty suffered and proper verification of the inputs used for export goods. The authorities were entitled to insist on documentary proof, and the material on record, including the re-verification report, supported the conclusion that the claims were inflated or unsubstantiated. In writ jurisdiction, the Court would not undertake a fresh minute examination of factual accounting entries when the department had conducted a thorough verification and the single Judge had already examined the matter in detail.

Conclusion: The withdrawal of drawback was upheld and the challenge on merits failed.

Final Conclusion: The appeal was rejected because no enforceable infirmity was shown in the departmental action or in the judgment under challenge, and the withdrawal of the drawback claims was sustained.

Ratio Decidendi: In writ jurisdiction, withdrawal of drawback will not be interfered with where the claimant is unable to show actual entitlement by reliable proof and no prejudice is established from alleged non-supply of a later verification report.

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