Delhi High Court
Sans Frontiers Through Its Partner Sh. ... vs Assistant Commissioner Of Customs, ... on 6 May, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~60
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 06th May, 2025
+ W.P.(C) 13407/2024
SANS FRONTIERS THROUGH ITS
PARTNER SH. AKHILESH CHANDRA .....Petitioner
Through:
versus
ASSISTANT COMMISSIONER OF CUSTOMS,
DRAWBACK .....Respondent
Through: Mr Aakarsh Srivastava, Senior
Standing Counsel, Adv Anand
Pandey, Adv Anugya Gupta
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner-M/s. Sans
Frontiers under Article 226 of the Constitution of India, inter alia, seeking
revocation of the alert dated 13th February 2020 and the release of the
pending duty drawbacks.
3. The Petitioner is a firm engaged in the business of exports primarily in
imitation jewellery, handicrafts, etc. for nearly 30 years. The Petitioner was
operating as an Export Oriented Unit (hereinafter, 'EOU') until 7th May
2014. After completion of the exit formalities from the EOU Scheme as per
Foreign Trade Policy/Handbook of Procedures, the Assistant Development
Commissioner issued the Petitioner with a Final De-Bonding Order on 14th
May 2025.
4. The case of the Petitioner is that he had been receiving the duty
drawback against eligible exports until June 2020, however, thereafter, the
Respondent stopped the drawback against Petitioner's eligible exports. The
duty drawbacks and other incentives were again withheld on 16th June 2020
with the message 'DBK AC has suspended the SB'. On 28th July 2022, the
Petitioner filed a grievance through Centralized Public Grievance Redress
and Monitoring System (hereinafter, 'CPGRAMS') portal vide reference no.
CBOEC/E/2022/05000 enquiring into the reason for the inordinate delay of
the release of pending duty drawback to the tune of Rs. 9,13,596/-.
5. Thereafter, it is stated that on 29th August 2022, the Petitioner was
informed that an alert was raised on the Import Export Code of the Petitioner
on 13th February 2020 which resulted in withholding of duty drawbacks. The
withholding of duty drawbacks was justified by the Department on the
ground of the alert having been placed. The same was, however, removed
thereafter by the Customs Department.
6. The Petitioner then challenged the same and the non-release of duty
drawbacks before the Commissioner of Customs in Appeal No.
C/52631/2018-CUS [SM]. The Commissioner of Customs disposed of the
said appeal stating that an alert has been placed again on the Import Export
Code of the Petitioner owing to an appeal, i.e. CUSAA No. 01 of 2022 titled
'Commissioner of Customs, Air Cargo Export v. M/s Sans Frontiers' , filed
before this Court against the Final Order No. A/53263/2018-SM(BR) dated
2nd November 2018 passed by Customs Excise and Service Tax Appellate
Tribunal (hereinafter, 'CESTAT'),
7. The said proceedings before CESTAT arose out of a Show Cause
Notice dated 24th August 2015 and the stand of the Respondent in the said
proceedings was that the duty drawbacks were inadmissible. The said Show
Cause Notice had been issued after invoking the extended period of
limitation and that led to the CESTAT setting aside the Show Cause Notice
and passing the consequential order. The said order reads as under:-
"1. The issue involved in this appeal is whether show
cause notice dated 24th August, 2015 have been rightly
issued invoking the extended period of limitation.
2. The admitted fact is that the appellant- assessee is
100% EOU and they availed duty drawback on the
exports effected by them during 2006-07 to 2013-14.
The appellant received objection from the Department
vide letter dated 12th March, 2014, regarding the
inadmissibility of the drawback availed. The appellant
in response, deposited the duty drawback so availed and
intimated the Revenue by their letter dated 31st March,
2014. The amount of deposit made Rs. 54, 80, 710/- also
included interest component of Rs. 28, 64, 768/-.
3. Subsequently, show cause notice dated 24th August
2015 have been issued invoking extended period of
limitation with proposal to confirm the same demand of
duty drawback along with proposal to appropriate the
amount already deposited.
4. Heard the parties.
5. Having considered rival contentions I find that
under the facts and circumstances the extended period
of limitation is not available to the Department, as the
appellant had deposited on being so pointed out, along
with interest, which is an admitted fact. Accordingly,
the impugned order is set aside. The appellant is
entitled to consequential benefits in accordance with
law. Appeal stands allowed."
8. This order of CESTAT came to be challenged before this Court in
CUSSA 1/2022 titled 'Commissioner of Customs, Air Cargo Export v. M/s
Sans Frontiers' and connected writ petition i.e. W.P.(C) 7962/2021 titled
M/s Sans Frontiers v. Commissioner of Customs (Exports) . The said two
proceedings were decided finally on 12th December 2023 in which the Court
has observed that the demand was made within a reasonable period when the
Department came to know of the wrong availment of the said duty
drawbacks. In respect of the belated issuance of the Show Cause Notice, the
Court deemed it appropriate to refrain from adjudicating on the said issue.
The Coordinate Bench in the peculiar facts had directed as under:
"80. We do not consider it apposite to decide in the facts
of the present case as to whether that the SCN dated
24.08.2015 was issued belatedly or not since the said
issue had been decided in favour of the Revenue by the
order passed by the Commissioner (Appeals), and has
not been adjudicated upon by the revision authority
having jurisdiction under Section 129DD of the
Customs Act.
81.In the peculiar facts of this case where the Revenue
originally had not taken any objection on the appeal
being heard by the learned CESTAT, and had also,
following the order of the learned CESTAT, sanctioned
refund of the Drawback, the Firm should not be left
remediless.
82. We, therefore, grant an opportunity to the Firm to
prefer a revision, under Section 129DD of the Customs
Act, against the order dated 14.05.2018 passed by the
Commissioner (Appeals).
83. We direct that if such a revision is preferred within a
period of two months, the same shall not be dismissed on
the ground of limitation and be entertained on merits by
the Central Government.
84. It is open for the Firm to raise all grounds, including
the issue as to whether the SCN dated 24.08.2015 was
barred by limitation. Needless to state that if so raised,
the same shall be considered by the Central Government,
and a speaking order shall be passed after affording an
opportunity of being heard to the Firm.
85. The writ petition is disposed of in the aforesaid
terms."
9. The said judgement was challenged before the Supreme Court by the
Petitioner in Civil Appeal No.12419/2024 titled 'M/s. Sans Frontiers vs.
Commissioner of Customs, Air Cargo, Export' wherein a stay has been
granted by the Court.
10. Ld. Counsel for the Petitioner has placed on record a copy of the
application being I.A.107988/2024 in Civil Appeal No.12419/2024.
11. The prayer in the application was for stay of the impugned judgement
dated 12th December 2023 and also the notice dated 6th July 2021 and
Demand-cum-Show-Cause-Notice dated 15th July 2021. The order of the
Supreme Court reads as under:-
"1. Appeal admitted.
2. Stay as prayed for in I.A. No. 107988 of 2024 is
granted pending disposal of the Civil Appeal.
3. Accordingly, IA No. 107988/2024 is disposed of".
12. In view of the fact that the judgment dated 12th December 2023 has
been stayed, there can be no justification for holding back of duty drawbacks.
13. Let the duty drawbacks be now released to the Petitioner within a
period of 30 days in accordance with law.
14. It is made clear that the release of the said duty drawbacks, however,
will be subject to the outcome of the Civil Appeal No.12419/2024.
15. The petition is disposed of in the above terms. Pending applications, if
any, are also disposed of.
PRATHIBA M. SINGH
JUDGE
RAJNEESH KUMAR GUPTA
JUDGE
MAY 6, 2025/'dc'/ck
