The Madras High Court (HC) has held that rejecting the claim of duty drawback without stating any reason is not valid.
M/s.Flextronics India Pvt. Ltd., the petitioner challenged the impugned orders passed by the first respondent under Rule 7A of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, rejecting the petitioner’s request for claiming duty drawback as per the provisions of Section 74 of the Customs Act, 1962 on the ground that the petitioner has not satisfactorily established the reasons for the delay in filing the duty drawback claim.
The petitioner had imported accessories meant for the manufacture of mobile phones from China After the utilisation of the imported accessories in the manufacture of mobile phones, the leftover accessories were re-exported and to petitioner is entitled to duty drawback as per the provisions of Section 74 of the Customs Act, 1962. The petitioner had reexported the accessories within the period of two years as provided under Section 74 of the Customs Act, 1962, which is not in dispute.
The accessories re-exported by the petitioner have also been identified by the 2nd and 3rd respondents. However, as per Rule 5(1) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, the petitioner will have to make a drawback claim within a period of three months from the date on which an order permitting clearance and loading of goods for exportation under Section 51 is made by the proper officer of Customs.
The petitioner claimed that due to unavoidable circumstances, they could not file the duty drawback claim within the stipulated period as prescribed under Rule 5 of the aforementioned Rule. Since the petitioner could not file the duty drawback claim within the stipulated period as fixed under Rule 5 of the aforesaid Rule, he had sought relaxation as per Rule 7A of the said Rule on 18.06.2020 before the 1st respondent (Central Government).
Justice Abdul Quddhose observed that the petitioner has satisfied all the statutory requirements for claiming duty drawback as per the provisions under Section 74 of the Customs Act, 1962. When the petitioner has given detailed reasons as to why they were unable to file the duty drawback claim within the prescribed time, the first respondent ought to have considered the said reasons objectively.
The impugned orders failed to state the reasons for rejecting the petitioner’s reasons for non-filing of the duty drawback claim on time. The Court quashed the Impugned order and the matter was remanded back to the first respondent for fresh consideration on the merits.
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