TaxTMI 
TaxTMI 
2026 (9) TMI 1298
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.... is in the business of importing nuts, bolts, washer, hand tools, etc., that fall under 'scaffolding items'. He submitted that the goods were detained by the respondent authorities and ultimately they were released on a provisional basis. Thus, it is urged that since the issue with regard to the classification of the goods are already laid quietus, similar orders may be passed. In this regard, he has placed reliance on the decision of the Division Bench of this Court dated 03.04.2025 passed in Special Civil Application No.3825 of 2023 and allied matters, against which the Special Leave Petition [SLP] (Civil) Diary No. 44987 of 2025 has been dismissed by the Supreme Court vide order dated 22.09.2025. Reliance is also placed on the order dated 19.11.2015 passed by the Commissioner of Customs (Appeals), Ahmedabad clarifying the Chapter Headings 7308 and 7318 relating to the 'scaffolding items', which was challenged by filing Revision Application before the Principal Commissioner and by the order 02.02.2025, the Revision Application has also been dismissed. Reliance is also placed on the recent decision of the Division Bench headed by the Hon'ble the Chief Justice dated 03.02.2026 ....
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....er laid down in sub-section (1) of section 142 of the Customs Act, 1962." 7.5 It is quite clear from the said Rule that any amount of drawback and interest when paid erroneously or is paid in excess of the entitlement of the claimant, on demand by a proper officer of the Customs, the claimant is required to repay the amount paid erroneously or in excess. Rule 16 of the Drawback Rules provides for recovery of an amount of drawback and interest paid erroneously or in excess of what the claimant is entitled to, on demand by a proper officer of the customs the same shall need to be repaid. And, where he fails to repay the amount, it is permitted to be recovered in the manner provided under Sub-section (1) of Section 142 of the Act. It is quite clear from Rule 16 of the Drawback Rules that what all it provides for is the recovery of excess drawback paid erroneously, but choses not to prescribe the time limit. The question which has come up for consideration as to whether in absence of any period of limitation provided under Rule 16 of the Drawback Rules, any reasonable time period could be read into the said Rule. It also provides for statutory mechanism of recovery under Secti....
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....pugned orders passed by the respondent No.4 rejecting the refund claims of the petitioner cannot be sustained and they deserve to be quashed and set aside and are accordingly quashed and set aside and the respondents - adjudicating authorities are hereby directed to sanction the respective refund claims of the claimant after following the law laid down by this Court in the case of NBM Industries (Supra) and pass fresh orders within a period of two months from the date of the receipt of the present order and to make the actual payment within a period of four weeks thereafter and also grant consequential reliefs which may be available to the petitioners under the relevant provision of the rules more particularly Rule 5 of the Rules. [6.1] Before parting with the present order, we are constrained to strongly disapprove such arbitrary act on the part of the lower adjudicating authority and/or lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Time and again the Hon'ble Supreme Court as well as various High Courts and this Court have disapproved such conduct/act on the part of the lower authorities in ignoring the bindi....
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....ral Board Excise and Customs, New Delhi to issue a detailed circular to all the adjudicating authorities considering the observations made by this Court in the present judgment and order as well as the law laid down by the Hon'ble Supreme Court in various decisions referred to in the present judgment and order, within a period of 30 days from the date of receipt of the present order so that such eventuality may not happen again and again." 10. In the instant case, the grievance on the part of the petitioners is that the Order-in-Original does not recognize the issue of limitation although the same being the settled law. Here the petitioners have exported the articles from Mundra Port and had claimed that drawback and benefit under the Focus Product Scheme (FPS). The allegation has been that it had indulged in misuse of drawback scheme and FPS and other exports incentives by way of making export of scaffolding items falling under CTH No.7308 by placing under CTH Nos.731816000, 39235010, 39269099 and 82057000 with the allegation of export of less quantity of goods than what was declared and over valuing of the export products. After the proper officer had allowed the export ....
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....not provide for the period of limitation, the reasonable period of limitation has to be read into the same and the SCN issued before expiry of a period of three years from the date of payment of the drawback to the petitioner cannot provide a reason for the Court to hold that the same as time barred. 14. The petitioners have shown the procedure for export of goods. It is a detailed procedure to urge that the petitioners have exported the goods following the procedure upon the export permitted by the proper officer and the final shipping bills being generated, the petitioners were entitled to duty drawback as the shipping bills were filed through EDI system. Under the EDI system, once the final shipping bill is generated, the same becomes the final claim for the duty drawback according to the petitioner and the same needs to be paid within three working days as per the Circular No.25 of 2000 of the department. 15. We note that the show cause notice is issued by the authority for the shipping bills from the years 2011 to 2015. The list of shipping bills has been given & barring a very few shipping bills which have been submitted here duty drawback has been paid to t....
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....ic time period. Additional reason is of the time stipulated for clearing the shipping bill which is of three days (3) and any late clearance also cannot furnish the reason to permit issuance of the SCN calculating from the date of payment of duty drawback. Even if, this angle is not dilated and left to the parties to argue before the concerned authority, at the best, for those bills where payment of duty drawback is within 3 years of the issuance of SCN, the adjudication can be permitted. This has not been at all considered in the order in original. Again, with no challenge having been made by the department to the decision of the proper officer where many of the aspects of the petitioners have been accepted and with non consideration of the decision of this Court as discussed at length, interference would be necessary. 19. The initiation of the action on the part of the DRI on an intelligence of is severally questioned when the proper officer has already held in favour of the assessee classifying the item of export under a different head. Reliance is placed also upon the case of M/S.CANNON INDIA PRIVATE LIMITED V/S. COMMISSIONER OF CUSTOMS, reported in 2021 AIR 1699 to ur....
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....of Chapter Heading 7318 and 8205 with regard to the 'scaffolding items', placing reliance on other judgments, has quashed and set aside the deficiency memo issued by the respondents and further directed to process the drawback claims of the petitioner and released the drawback amount with interest. Relevant observations are as under: "9. The petitioner has exported nuts by classifying them under chapter heading 73181600 and clamps by classifying them under chapter heading 82057000, therefore, specific description is provided for both the exported goods and they have been classified in that specific head. Even as per the say of the department, by the impugned deficiency note, heading which provides the most specific description shall be preferred to a general description. The classification provided by the petitioner and accepted by the proper officer is under the head providing specific description whereas the department wants to take it to general head. The similar deficiency memo was issued to another exporter M/s. New Pensla Industries Limited on the same lines. The said exporter has approached this Court challenging the deficiency memo by way of preferring petition and....