ORDER
T.V. Sairam, Member (T)
1. There are two appeals/applications directed against the common order of the Commissioner of Customs, ICD, Tughlakabad, New Delhi made on 9-11-05 ordering recovery of drawback of Rs. 17,97,108/- from M/s. Malvika Apparels and Rs. 36,04,057/-from M/s. Handloom Only, under Rules 16 and 16A of the Customs and Central Excise Duties Drawback Rules read with Section 75(1) of the Customs Act, 1962. In addition, recovery of interest on the aforesaid drawback was also ordered.
2. From the record, it appears that based on an information received by the DRI that one consignment of the appellant M/s. Malvika Apparels destined for USA was lying uncleared at Dubai Port, the authorities found that sale proceeds in respect of the goods exported realised were not within the time allowed under the law. Action to recover such drawback was therefore, initiated. In the impugned order, the learned Commissioner has observed that the drawback amount paid to the exporter was to be recovered as per procedure prescribed under Rule 16A of the Customs and Central Excise Duties (Drawback) Rules, 1995.
3. The learned Counsel for the appellants states that in case of Mrs. Prabha Kiran Jain, a sum of Rs. 10,43,904/- has been realised as export proceeds within the extended time period out of a sum of Rs. 36,04,057/-. In the second case viz., ShriPawan Kumar Jain, learned Counsel states that a sum of Rs. 2,05,090/-out of a sum ordered by the Commissioner of Rs. 17,97,168/-has been recovered as sale proceeds within the extended period. He further states that a sum of Rs. 2,20,466/- towards their drawback claim due to them and made before the authorities have not since been paid to them, although the same is included in the amount ordered to be recovered from them.
4. According to the learned Counsel, Rule 16A(2) necessitates the department to initiate proceedings “on receipt of relevant information from the Reserve Bank of India”. It was argued at length that the appellants have approached the bank authorities for getting the time-limit extended and in the meanwhile the customs authorities have initiated an action to recover the drawback without waiting for any extention order. In this context, he would rely upon the judgment of the Hon’ble Supreme Court in Murarilal Jhunjhunwala v. State of Bihar and Ors. , particularly of para 5 in which it was observed that technically, the authorities may be justified in prosecuting the appellant for carrying on the business without obtaining the licence and it was also observed that the appellant was legitimately entitled to the licence which has been unreasonably withheld from him and in these circumstances, the appeal was allowed.
5. He would also rely on another judgment in the case of Commissioner of Central Excise v. M.P.V. & Engg. Industries reported in 2003 (153) E.L.T. 485 (S.C.) more particularly para 11, in which it was held that the benefit of exemption should be extended with effect from the date on which the application for grant of registration was made before the competent authority.
6. According to the learned Authorized Representative of the Department, referring to Rule 16A(4) and stating that if sale proceeds were realised by the exporter within one year from the date of recovery of the drawback recovered from him under Sub-rules (2) & (3) of Rule 16A, the amount of drawback so recovered shall be repaid to the exporter, was no argument since in this case no drawback amount has been paid by the exporter to the department under Rule 16A. It was argued that where sale proceeds in respect of export goods has not been realised within the prescribed time period including any extension thereof, the drawback amount paid by the exporter had to be recovered.
7. We have heard both sides and examined the case record. It is clear that no single perspective on an issue could contain the whole truth. Admittedly, a portion of the drawback availed by the importer in respect of the sale proceeds have been recovered by the appellants even beyond the extended period. However, a careful reading of the provisions under the law mainly Section 75 of the Customs Act and Rule 16A of the Customs and Central Excise Duties (Drawback) Rules, indicates great emphasis on the time period within which the sale proceeds in respect of exported goods have to be realised. The provisions have also considered the consequences of non-realisation and have laid down suitable mechanism to safeguard the revenue’s interest by holding vide the second proviso to Section 75(1) that wherever sale proceeds were not received within the time allowed under FEMA 99, no drawback shall be deemed never to have been allowed, and in case drawback has already been paid erroneously, such drawback is recoverable under Section 75A(2) read with Rules 16 & 16A.
8. As regards the contention raised before us that as per Sub-rule (2) of Rule 16A, the proceedings have not been initiated on receipt of relevant information from the Reserve Bank of India, it is observed that admittedly, no such contention was ever made before the authorities below and this has come up now for the first time. In view of this and the various provisions of law referred to above, we do not find adequate reasons for total waiver of pre-deposit. A penny, they say will hide the biggest star in the universe, provided it is held close enough to one’s eyes. Having regard to the facts and circumstances of the case and keeping in view the total liability of the appellants under the impugned order, we direct the appellant in Customs Appeal No. 388/06 (M/s. Handloom Only) to pre-deposit a sum of Rs. 8,00,000/- (Rupees eight lac ) within 8 weeks from today, failing which that appeal shall stand dismissed. On deposit of the said amount, the pre-deposit of the remaining amount of drawback and interest claimed under the impugned order shall stand waived during the pendency of the appeal. In Customs Appeal No. 387/06 (M/s. Malvika Apparels), we direct the appellant to pre-deposit a sum of Rs. 4,00,000/- (Rupees four lac) within 8 weeks from today failing which that appeal shall stand dismissed. On deposit of the said amount, the remaining amount of drawback and interest ordered to be recovered from them shall stand waived during the pendency of the appeal. Post both the mattes for reporting compliance on 2-1-2007.
9. The two applications stand disposed of accordingly.
(Dictated and pronounced in open Court)