The High Court of Delhi, directed Customs to release ₹9.13 lakh in duty drawback to the exporter, stating there was no justification for withholding the amount.
Sans Frontiers,petitioner-assessee,a firm that has been exporting imitation jewellery, handicrafts, and other goods for nearly 30 years. It operated as an Export Oriented Unit (EOU) until 7th May 2014 and completed the exit formalities from the EOU Scheme. A Final De-Bonding Order was issued to the petitioner on 14th May 2025.
Know the complete aspects of tax implications of succession, Click here
The petitioner had been receiving duty drawbacks for eligible exports until June 2020, but the payments were stopped after that. On 16th June 2020, the duty drawbacks and incentives were withheld again, with a message stating ‘DBK AC has suspended the SB’. The petitioner filed a grievance through the CPGRAMS portal on 28th July 2022, seeking an explanation for the delay in releasing the pending duty drawback of Rs. 9,13,596/-.
The petitioner was informed on 29th August 2022 that an alert had been placed on its Import Export Code on 13th February 2020, which caused the withholding of duty drawbacks. The Customs Department later removed the alert, leading to the release of the drawbacks.
The petitioner had challenged the non-release of duty drawback before the Commissioner of Customs. The appeal was dismissed as an alert had been placed again on the petitioner’s Import Export Code due to a pending appeal filed by the Department before the High Court against a Customs,Excise and Service Tax Appellate Tribunal (CESTAT) order dated 2nd November 2018.
The CESTAT had earlier set aside a Show Cause Notice dated 24th August 2015, holding that the extended time limit could not be used since the petitioner had already deposited the duty drawback with interest after objections were raised. The tribunal allowed the appeal and granted relief.
The Department later challenged this decision before the High Court. On 12th December 2023, the Court noted that the demand was raised within a reasonable time but did not decide whether the Show Cause Notice was time-barred. It allowed the petitioner to file a revision before the Central Government and directed that it should be heard on merits, without being rejected for delay.
Complete practical guide to Drafting Commercial Contracts, Click Here
The petitioner then moved the Supreme Court against the High Court order, and a stay was granted.
The petitioner had requested a stay on the High Court judgment dated 12th December 2023, along with two related notices. The Supreme Court admitted the appeal and granted the stay, pending the final decision in the case.
The Division bench of Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta following this, held that there was no reason to hold back the duty drawback and directed the authorities to release it within 30 days as per law. It clarified that the payment would be subject to the outcome of the ongoing appeal. The petition was then disposed of.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
