Order Date – 25 May 2023

Parties: M/s. Arihant Overseas (Prop.Raj Kumar Jain) Vs Commissioner of Customs Air Cargo Complex (Export)

Facts –

• The Appellant, M/s. Arihant Overseas, exported readymade garments (under Duty Draw back claim) to four buyers in Russia and one buyer in Poland. Upon necessary inquiries the party found to be genuine by the Punjab National Bank, the customs informed to defreeze the bank account of the appellant in July 2003.
• On an inquiry it was appeared that appellant have wrongly taken the drawback benefit as the goods exported by them did not reach Russia and the money that came by way of remittances is not the sale proceeds, rather it is not relatable to the exports at all. 
• Accordingly, a show cause notice dated 26.12.2016 was issued invoking the extended period of limitation demanding the duty drawback amount of ₹ 42,41,332/- alleged to be availed fraudulently with further proposal to confiscate the goods already exported along with interest and penalty.

Issue – 

• Whether the appellant is rightly claimed duty draw back?

Order – 

• The Tribunal observed that the show cause notice has been issued after more than 13 years from 27.04.2003, when the Customs has closed the matter by writing to Punjab National Bank, to defreeze the bank account of the appellant. Thus, held that the extended period is not available to Revenue, and this ground is decided in favour of the appellant and against the Revenue.
• The show cause notice is based on un-substantiated and vague facts, which have no legs to stand. Admittedly, the appellant have received the payment for the goods exported, which is duly supported by the BRCs issued and re-certified after verification by the Punjab National Bank.
• Further, there is no evidence brought on record by the Revenue that the appellant have returned any remittance received on account of exports to the buyer located in the foreign country. Revenue have not brought on record any evidence of diversion of goods to any third country. The goods have been exported by air from India to Russia and thus, chances to diversion to third country is highly impossible, without the goods first reaching Russia.
• The appeal is allowed. The appellant shall be entitled to consequential benefits.