Drawback Demand Quashed as Exporter Not Properly Heard: Madras HC Orders Reconsideration, Directs Exporter to Submit BRCs [Read Order]

The Madras High Court has set aside an order-in-original, which had directed an exporter to repay ₹15.81 lakh as Duty Drawback, along with applicable interest. The Court found that the exporter had not been given a proper opportunity to present their case, as notices related to the proceedings were sent to an outdated address.

The petitioner, K P Trade Links challenged the recovery order on the ground that it was passed ex parte, without the issuance of any show cause notice or personal hearing notice to the correct address.

It was contended that the exporter never received these communications and, as such, was deprived of an opportunity to submit the Bank Realization Certificates (BRCs) for the shipping bills in question documents that would have demonstrated their entitlement to the claimed drawback.

The Court observed that although the respondent customs authorities had issued hearing notices on multiple dates 05.03.2022, 06.05.2023, and 18.05.2023 these were returned undelivered, as they had been sent to the petitioner’s old address.

While the respondent claimed to have pasted hearing notices on the office notice board for 15 days, the Court ruled that this was not sufficient to ensure service of notice on the affected party.

The petitioner presented evidence of their updated address, as registered with the Director General of Foreign Trade (DGFT), showing that the respondent had failed to update or verify this new address before dispatching critical communications. As a result, the impugned order was passed in breach of natural justice.

Furthermore, Justice Krishnan Ramasamy noted the petitioner’s assertion that they were in possession of all relevant BRCs and were ready to submit them. The Court, considering the procedural lapse, held that the petitioner must be given an opportunity to defend the claim, submit the BRCs, and participate in a proper adjudication process.

Accordingly, the Madras High Court quashed the impugned order-in-original and remanded the matter back to the respondent authority for fresh adjudication.

The bench directed the customs department to provide a personal hearing to the petitioner, allow the submission of necessary documents, and pass final orders within 12 weeks from the date of receipt of the court’s order. The writ petition was allowed, and the connected miscellaneous petitions were closed, with no order as to costs.

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