2025 (2) TMI 809 - HC - Customs

Drawback claim rejected for five-year delay in submitting Rule 13 documents despite having them available

M/s. Gill And Co. Pvt. Ltd. Versus Union Of India & Ors.

Gujarat HC dismissed petition challenging rejection of drawback claim filed after five and half years delay. Petitioner exported goods in 2005-06 through ... Sanction of the drawback claim of the petitioner set aside - rejection on the ground that the drawback claim was filed afer a delay of five and half years - no explanation for not submitting the original triplicate copy of the shipping bill available with the petitioner - Rule 13 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995 - HELD THAT:- On perusal of Rule 13 of the Rules, 1995, it appears that the same provides for the manner and time for claiming drawback on goods exported other than by post and that the triplicate copy of the shipping bill for export of goods is deemed to be a claim for the drawback filed on the date on which the proper Officer of the Customs makes an order permitting clearance and loading of goods for exportation under Section 51 of the Customs Act, 1962 and said claim of drawback is required to be retained by the proper Officer making such order - Sub-section (2) of Rule 13 of the Rules, 1995 provides that the claim for drawback should be accompanied by the copy of the export contract or letter of credit, copy of packing list, copy of ARE-I, wherever applicable, insurance certificate, wherever necessary and copy of communication regarding the rate of drawback where a drawback claim is for a rate determined under the Rule 6 or Rule 7 of the Rules, 1995 by the Commissioner of Central Excise as the case may be relating to the cases where either the amount of rate of drawback has not been determined or to be determined at a lower rate. Therefore, essentially there has to be a claim to be made for claiming drawback for the goods exported other than by post on the basis of the triplicate copy of the shipping bill detained by the proper Officer to be accompanied by the relevant documents as specified in Sub-rule (2) of Rule 13 of the Rules, 1995. On perusal of the facts considered by the Appellate and the Revisional Authority, it appears that at the relevant time in the year 2005-06, the goods were manually cleared for export by the appellant vide ten shipping bills and therefore the petitioner was required to be provided with the triplicate copy of the shipping bills for lodging the drawback claim. The petitioner was also provided with the triplicate copy at the relevant time which was reported to be lost in the year 2011. Therefore, there is no explanation for not submitting the original triplicate copy of the shipping bill available with the petitioner. Both the Appellate Authority as well as the Revisional Authority have rightly come to the conclusion that when the documents were lost on or around 14.05.2011, the petitioner was having the same documents in its possession and in absence of any specific dates made available for loss of such original documents, for the specific cause that prevented the petitioner from filing the drawback claim immediately on receipt of the triplicate copy of the shipping bills from the Customs after export or some reasonable time thereafter, the only reason given by the petitioner is that the person handling the affairs of drawback claim had left the employment - such vague excuse on part of the petitioner cannot be accepted as there is clear delay and latches on the part of the petitioner to lodge the claim and the contention raised on behalf of the petitioner that the duty was cast upon the respondent-Authority to sanction the claim is also not acceptable in view of the fact that the original triplicate copy of the shipping bill was with the petitioner at the relevant time which was lost in the year 2011 and there is no plausible explanation coming forth from the petitioner to explain the delay and laches from the year 2006 to 2011. Conclusion - The drawback claim could not be considered valid due to the significant delay and the absence of the required triplicate copy of the shipping bill. It is not required to interfere in the concurrent findings of fact arrived at by the Commissioner of Customs (Appeals) as well as the Revisional Authority while exercising the extra-ordinary jurisdiction under Article 227 of the Constitution of India - petition dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment include:Whether the petitioner's drawback claim filed after more than five years from the date of export is valid and can be sanctioned.Whether the petitioner was responsible for the delay in filing the drawback claim and the loss of the original triplicate copy of the shipping bill.Whether the Customs authorities were obligated to sanction the drawback claim despite the delay and loss of documents.Interpretation and application of Rule 13 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995 regarding the filing and processing of drawback claims.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Validity of the Drawback Claim Filed After Five YearsRelevant legal framework and precedents: Rule 13 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995, and related provisions of the Customs Act, 1962, govern the filing and processing of drawback claims. The rule stipulates that the triplicate copy of the shipping bill is deemed to be the claim for drawback filed on the date of export.Court's interpretation and reasoning: The Court observed that the petitioner filed the drawback claim after an inordinate delay of over five years. The triplicate copy of the shipping bill, which is crucial for processing the claim, was reportedly lost, and the petitioner failed to provide a satisfactory explanation for the delay.Key evidence and findings: The petitioner claimed that the documents were lost in transit in 2011, and an FIR was filed. However, the Court noted that the petitioner had the documents in possession until 2011, and there was no explanation for the delay from 2006 to 2011.Application of law to facts: The Court applied the provisions of Rule 13 and found that the delay in filing the claim and the lack of documentation were significant issues that could not be overlooked.Treatment of competing arguments: The petitioner argued that the delay was not deliberate and that the Customs authorities should have processed the claim based on available documents. The respondents contended that the delay and lack of documentation were grounds for rejecting the claim.Conclusions: The Court concluded that the drawback claim could not be considered valid due to the significant delay and the absence of the required triplicate copy of the shipping bill.Issue 2: Responsibility for Delay and Loss of DocumentsRelevant legal framework and precedents: The Customs Act, 1962, and related rules place the onus on the exporter to file the necessary documents for claiming drawbacks.Court's interpretation and reasoning: The Court found that the petitioner was responsible for the delay and the loss of documents. The petitioner's explanation that an employee left and the documents were lost in transit was deemed insufficient.Key evidence and findings: The petitioner failed to provide specific dates or reasons for the delay and did not take immediate action to reconstruct the lost documents.Application of law to facts: The Court applied the legal requirements for filing drawback claims and found that the petitioner's actions did not meet the necessary standards.Treatment of competing arguments: The petitioner argued that the Customs authorities should have retained the triplicate copy, but the Court found that the petitioner had possession of the documents until 2011.Conclusions: The Court held that the petitioner was responsible for the delay and loss of documents, which affected the validity of the claim.Issue 3: Obligation of Customs Authorities to Sanction the ClaimRelevant legal framework and precedents: Rule 13 of the Drawback Rules, 1995, and related provisions of the Customs Act, 1962.Court's interpretation and reasoning: The Court found that the Customs authorities were not obligated to sanction the claim due to the petitioner's failure to comply with the required procedures and documentation.Key evidence and findings: The Customs authorities had no record of the triplicate copy of the shipping bill, and the petitioner did not provide a valid reason for the delay.Application of law to facts: The Court applied the rules governing drawback claims and found that the Customs authorities acted within their rights to reject the claim.Treatment of competing arguments: The petitioner argued that the authorities should have processed the claim, but the Court found that the lack of documentation and delay justified the rejection.Conclusions: The Court concluded that the Customs authorities were justified in rejecting the claim due to the petitioner's failure to meet the necessary requirements.3. SIGNIFICANT HOLDINGSCore principles established: The Court emphasized the importance of timely filing and proper documentation for drawback claims under Rule 13 of the Drawback Rules, 1995. It held that the onus is on the exporter to ensure compliance with the legal requirements.Final determinations on each issue: The Court dismissed the petition, upholding the decisions of the Commissioner of Customs (Appeals) and the Revisional Authority. It found that the petitioner's claim was invalid due to the delay and lack of documentation.