2024 (10) TMI 1411 - HC - Customs

Duty drawback claims denied for woolen garments outside specified categories under clarificatory circular

The Madras HC dismissed a writ petition challenging denial of duty drawback claims for woolen readymade garments. The petitioner argued that drawback ... Duty Drawback claim - Impugned Order is challenged by the Petitioner primarily on the ground that the denial of Duty drawback long after the export were made and the benefits which were extended have been denied pursuant to Circular No.55/99-Cus dated 25.08.1999 - HELD THAT:- The order does not call for any interference. The issue has been examined by the Revisional Authority in the light of the decision of the Karnataka High Court in the case of CCE Bangalore Vs. Central Manufacturing Technology Institute [2001 (7) TMI 147 - HIGH COURT OF KARNATAKA AT BANGALORE], wherein, it has been held that clarificatory notifications are retrospective in nature. The petitioner was not entitled to drawback claim as the product exported by the petitioner was Woolen Readymade Garments. It has been clarified by CBEC Circular No.55/99 dated 25.08.1999 that S.S.NO.62.09 is applicable to only woollen Suits/Trousers/Blazers/Jackets, therefore woollen garments other than these categories are not covered by any of the S.S. Nos of Drawback Table and hence the exporters can only claim Brand Rate for the same. This Writ Petition is dismissed. Issues:Challenge to Impugned Order under Section 129DD of the Customs Act, 1962 regarding Duty Drawback on export of woven woolen garments.Analysis:The Petitioner exported woven woolen garments and claimed Duty drawback under Section 75 of the Customs Act, 1962 under Serial No.62.01 of the Duty Draw Back Schedule 1999-2000. The Department issued a Demand Notice based on Circular No.55/99-Cus dated 25.08.1999, challenging the duty drawback. The Writ Petition filed by the Petitioner was disposed of with directions for an inquiry. Subsequently, the Deputy Commissioner of Customs issued an Order calling for the repayment of the duty drawback sanctioned to the Petitioner. This Order was later reversed on appeal by the Commissioner of Customs (Appeals).The Commissioner of Customs then filed a revision under Section 129DD of the Customs Act, 1962, challenging the appellate order. The revisional authority set aside the appellate order and restored the original order demanding repayment of the duty drawback. The Government observed that the goods exported by the Petitioner did not fall under the relevant category for duty drawback as per Circular No.55/99-Cus dated 25.08.1999. The Government emphasized that the circular had a clarificatory nature and was retrospective in effect based on legal precedents.The Petitioner challenged the Impugned Order on the grounds of retrospective application of the Circular, arguing that the benefits extended should not have been denied based on a circular issued after the exports were made. However, the Court upheld the Impugned Order, citing the clarificatory nature of the circular and legal precedents establishing the retrospective effect of such clarifications. The Court dismissed the Writ Petition, affirming the validity of the Impugned Order and denying the duty drawback claim to the Petitioner.In conclusion, the Court found that the denial of duty drawback was justified based on the clarifications provided in Circular No.55/99-Cus dated 25.08.1999, and upheld the Impugned Order reversing the appellate decision. The Court relied on legal precedents to support the retrospective application of clarificatory notifications, ultimately ruling against the Petitioner's claim for duty drawback on the exported goods.