In a major relief to M/s. Arihant Overseas, the appellant, the New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the demand of customs duty-draw back.
The appeal has been filed by the exporter, Arihant Overseas confirming the demand of duty draw-back of Rs.35 lakhs and further ordering confiscation of the goods already exported under draw back, under Section 113 (i) of the Customs Act and imposition of penalty of Rs.30 lakhs under Section 114 (iii) of the Customs Act.
It appeared to Revenue that export incentives in the form of draw-back have been availed by the appellant, corresponding to the exports made to the Russian Companies / buyers under Indo-Russia Rupee – Ruble Agreement. However, as per the information provided by the Consulate General of India, Moscow in Russia, the consignees/buyers had not traded with Indian companies during the years 2002-2005.
It appeared to Revenue that appellant have wrongly taken the drawback benefit of ₹ 42 lakhs, as the goods exported by them vide shipping bills and it further appeared that exports were cleared through Air Cargo Exports, under the claim of drawback. It also appeared that appellant have wilfully misstated the particulars declared in the shipping bills with intent to fraudulently avail the benefit of drawback.
The Counsel for the appellant argued that the show cause notice is wholly barred by limitation and that the show cause notice has been issued without there being any adverse material on record, save and except the assumptions and presumptions and that no evidence has been adduced by the Revenue in support of the allegation.
A Single Member Bench of the Tribunal comprising Anil Choudhary, Judicial Member observed that “Revenue have not brought on record any evidence of diversion of goods to any third country. I find that admittedly, 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.”
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