2019 (8) TMI 1388

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....odically claimed drawback of duty paid on the goods forming part of the export goods of the duty paid on the final product itself. In connection with a claim of duty drawback of Rs. 7,79,397/-, the petitioner had inadvertently taken the CENVAT credit on the goods lying on stock which were meant for export and as a result, there was an excess claim and grant of drawback to the extent of Rs. 4,92,251/-. Realizing the mistake, the petitioner had deposited the entire excess amount of Rs. 4,92,251/- on 18.10. 2004. b) On 13.12.2004, a show cause notice was issued proposing to appropriate the aforesaid amount deposited under Section 75 of the Customs Act, along with a proposal to impose penalty under Section 114 (iii) and confiscation under Sec....

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....y other action that may be taken under the Central Excise Act, 1944 or the Customs Act, 1962. 5. I have given careful consideration to the submissions made by the respective counsels. 6. It is not in dispute that when the petitioner realized that there was an excess claim and grant of drawback to the extent of Rs. 4,92,251/-, he had deposited the same on 18.10.2004 and the show cause notice came to be issued subsequently on 13.12.2004. The averments in the show cause notice, though states that it has been issued without prejudice to any other action, has not made a claim with regard to the interest. 7. Section 75A (2) of the Customs Act, 1962, as it then stood, reads as follows:- Section 75 A (2). Interest on drawback-Where any drawbac....

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....otice or hearing, would be invalid. In Nirlon Limited V. Union of India reported in 2007 (209) E.L.T. 12 (Bombay), a Division Bench of the Bombay High Court had followed Madhumilan Syntex's case (supra) and held that the demand of interest, without a prior show cause notice, would be in violation of the principles of natural justice. The relevant portion of the said order reads as follows:- "6. The case of the petitioner is that it followed the method permitted by the Deputy Commissioner and it should not be made to suffer. In any case, the petitioner should be afforded a hearing and for that purpose, reliance is placed on the judgment of the Apex Court in Union of India and Ors. v. Madhumilan Syntex Pvt. Ltd. to the effect that the ....