ORDER
Mohan Shantanagoudar, J.
Page 0498
1. Heard the learned Counsel on both sides and perused the material on record. The petitioner has sought for a writ of certiorari to quash the orders passed by the Respondents-1 & 4 vide Annexures-H and Annexures-E1 to E6 respectively.
2. Petitioner who is a manufacturer and exporter of the ready-made Garments availed the services of the Canara Bank Overseas Branch, Bangalore, an Authorised Dealer under the Foreign Exchange Regulation Act 1973 (hereinafter referred to as ‘FERA’ for short) to deal with the export documents of the petitioner’s establishment. The petitioner exported goods and claimed drawback concession Under Section 75 of the Customs Act 1962 and the same has been sanctioned and paid to the petitioner. After Page 0499 sanction of drawback money, the petitioner has failed to realise the sale proceeds within the prescribed period. It is not in dispute that the sale proceeds in respect of the goods exported had not been received within the stipulated time (six months) provided under ‘FERA’ and the Foreign Exchange Management Act 1999 (hereinafter referred to as ‘FEMA’ for short). Even thereafter also sale proceeds are not received by petitioner. Therefore, a show cause notice was issued to the petitioner under Rule 16-A of the Customs and Central Excise Duties Drawback Rules, 1995 calling upon him to show cause as to why the draw back amount sanctioned to the petitioner should not be treated as “never to have been allowed”, inasmuch as, the sale proceeds in respect of goods exported under the shipping bills are not realised by the exporter within time limit allowed under the provisions of ‘FERA’ & ‘FEMA’ (within six months).
Since the petitioner failed to submit his reply to the said show cause notice, an exparte decision was taken by the Additional Commissioner of Customs, Export Terminal, Bangalore vide Annexures-E1 to E6, directing the petitioner to re-pay the drawback amounts within 60 days from the date of the order in terms of Rule-16-A of the Customs & Central Excise Duty Drawback Rules-1995. Six separate orders are passed, as the petitioner was paid drawback amounts under six independent shipment bills.
Challenging the said orders at Annexures-E1 to E6, petitioner filed appeal before the Commissioner of Customs (Appeals), Bangalore in Appeal Nos. 134/2003 to 139/2003. The appeals also came to be dismissed on 27.03.2003 vide Annexures-F1 to F6 to the writ petition. The joint revision filed by the petitioner also came to be dismissed by Revisional Authority viz., the Ministry of Finance (Department of Revenue) by the order dated 31.05.2004 in F. No. 373/92-97/DBK/2003-RA vide Annexure-H to the writ petition. Hence this petition.
3. Learned Counsel for the petitioner submitted that the proceeding Under Section 18(2)(3) read with Section 51 & 52 of the ‘FERA’ was concluded in favour of the petitioner and the Enforcement Directorate while dropping the proceedings has observed that “in an helpless situation, the petitioner was unable to realise the export proceeds”. Based on the said order passed by the Enforcement Directorate dated 19.04.2000, the petitioner contends that it is not a fit case for recovery of drawback amounts paid to the petitioner. According to the petitioner, in spite of his best efforts he could not realise the export proceeds, and that therefore, he should not be penalised. He further submits that the Central Government ought to have considered the prayer of the petitioner Under Section 17 of the Customs and Central Excise Duties Drawback Rules 1971 for waiver and consequently, ought to have allowed the drawback concession in respect of the goods exported, despite the fact that the exporter petitioner has not received the expert proceeds.
4. Per contra, Sri. N. Devadas learned Senior Advocate appearing on behalf of the respondents contended that the Revisional Authority has in fact considered the request of the petitioner and refused to grant exemption Page 0500 under-Section 17 of the Customs and Central Excise Duties Drawback Rules 1971. He further submitted that the proceedings before the Enforcement Directorate arising under the provisions of FERA/FEMA are entirely independent and different from the proceedings on hand which are arising out of the Customs Act relating to drawback amount and that therefore, even if the Enforcement Directorate has dropped the proceedings against the petitioner, the proceedings on hand remain unaffected.
5. There cannot be any dispute that the proceedings Under Section 18(2) and 18(3) read with 50 & 51 of ‘FERA’ 1973 are meant for imposing penalty on the wrongdoer under the provisions of the Foreign Exchange Regulation Act 1973. Thus, the said proceedings are entirely the independent of the proceedings relating to recovery of drawback amount paid to the petitioner by the Central Government and both these proceedings are not dependent each other. Thus, even if the proceedings before the Enforcement Directorate initiated Under Section 50 & 51 of the ‘FERA’ 1973 are dropped, the same will not vitiate or affect the proceedings arising under the provisions of Section 75(1) of the Customs Act 1962 read with Rule 16-A of the Customs & Central Excise Duty Drawback Rules-1995. It is not disputed by the petitioner that the export proceeds in respect of the goods exported by the petitioner had not been received within the stipulated time i.e., within six months and even thereafter. However, the same was sought to be explained by contending that due to the negligence on the part of the banker i.e., Canara Bank Overseas Branch, the sale proceeds were not received. The said contention of the petitioner was not found favour with either by the Appellate Authority or by the Revisional Authority. The proviso to Section 75 of the Customs Act read with Rule-8 of Foreign Exchange Rules-1974 make it clear that the drawback amount shall be disallowed if the full export value of the goods exported is not received by the exporter within stipulated time of six months from the date of the export of the goods. These Rules do not provide for waiver of the condition on the ground of negligence either on the part of the banker or any other agency. When the exports are made, an obligation is cast on the exporter in terms of the declaration made by him to realise the export proceeds within the statutory period of six months from the date of export, failing which, the paid drawback amount is recoverable. The records disclose that the goods were exported on 12.07.1993 and the export proceeds were not received till the month of May 2000 (Date of issuing show cause notice). Because of the inaction on the part of the petitioner-Exporter in not recovering the sale proceeds, the State has lost revenue.
6. The concession relating to paying drawback amount to the exporter is provided on the guarantee that the State will earn revenue out of foreign exchange. Thus, immediately after the export of the goods, the drawback concession is given to the petitioner-exporter. As the petitioner failed to secure the revenue to the State in the form of foreign exchange, the State is entitled to get back the drawback amounts paid to the petitioner. As aforesaid, merely because the proceedings relating to imposition of penalty Page 0501 under the provisions of FERA are dropped, the present proceedings relating to recovery of drawback amounts paid to be petitioner cannot be dropped. Under such circumstances, the Authorities concerned have rightly proceeded to recover the drawback amount paid to the petitioner. In view of the aforesaid facts and circumstances, it cannot be said that the impugned orders are unjustified or illegal. On the other hand, the orders impugned in this writ petition are perfectly legal and justified.
7. The next contention of the petitioner that the Central Government has not considered his request to relax/exempt him from re-paying the drawback amount under Rule-17 of the Customs and Central Excise Duties (Drawback) Rules) 1995, also cannot be accepted. As could be seen from the order passed by the Revisional Authority (Government of India) dated 31.05.2004 vide Annexure-H, it is specifically held in paragraph-9 of the order that the Government is of the opinion that condition with regard to realization of sale proceeds cannot be waived or relaxed. Thus, the prayer of the petitioner to waive or relax the condition relating to realization of sale proceeds is rejected and consequently, his prayer for exemption under Rule-17 of the Customs and Central Excise Duties (Drawback) Rules) 1995 came to be rejected.
8. In view of the foregoing reasons, I do not find any reason to interfere with the impugned orders and consequently, the writ petition is liable to be dismissed.
The writ petition is, therefore, dismissed.