Ceat Tyres of India Ltd. vs Union of India

Sujata Manohar, Actg. C.J.

The petitioners carry one business, inter alia, of manufacturing tyres and tubes and exporting the same. During the years 1978-79, the petitioners company has exported to Pakistan Nylon Tyres manufactured by the petitioner No. 1 out of material on which duties had been paid. It is an accepted position that u/s 74 and 75 of the Customs Act, 1962 in respect of the export of these Nylon Tyres, the petitioners were entitled to drawback at the rate to be fixed by the Central Government by notification in the Official Gazette. In respect of the export of these tyres to Pakistan for the year 1978 the Government of India, Ministry of Financed fixed the duty drawback rates for the period 1-1- 1978 to 31-12-1978 by Notification no F/GOI/2001/18/78-DBK, dated 9-2-1979. The petitioner accordingly, by their letter dated 4-5-1979 addressed to the Superintendent, Customs (DBK), Amritsar, Punjab sent 23 claim bills in respect of export Bylon Tyres effected by them during the calendar year 1978. In the said letter the petitioners also stated that they had claims for duty drawback in respect of exports effected during February/march 1979 in respect of six export bills bearing Nos. 328, 329, 357, 386 and 287. The The petitioners requested that since the drawback rates for February/March 1979 were yet to be fixed by the Ministry of Finance, these claims should be kept pending. The petitioners addressed subsequently another letter dated 13-9-1979 to the Superintendent, Drawback, Department, Customs Division at Amritsar reminding him about 23 claim bills and once again requesting that in respect of six export bills for the months of February/march 1979 that claims should be kept pending because the duty drawback rates were yet to be fixed by the Ministry of Finance.

By their letter dated 7th/10th December 1979 addressed to the Deputy Secretary to the Government of India, Department of Revenue and Banking, the petitioners applied for fixation of duty drawback rates on Nylon Tyres (Brand rates) on exports made by them and to be made by them for the calendar year 1979. The petitioners furnished various particulars alongwith this application and requested that a separate rate should be fixed for the period 1-1-1979 to 31-8-1979 and for the period 1-9-1979 to 31-12-1979 for reasons set out therein. Thereafter, on 9-4- 1980 the Verification Officer visited the factory of the petitioners in connection with fixing the rate of duty drawback for the year 1979.

Ultimately, by letter dated 16-1-1981 addressed to the petitioners from Director (Drawback), Government of India, Ministry of Finance, Department of Revenue, the petitioners were informed that it had been decided to allow drawback to the petitioners at the rates indicated in the annexure to that letter on the export of goods manufactured by the petitioners. The rates so fixed were for the period 1-1-1979 till 31- 3-1980. A detailed annexure running into 9 pages gives the rate of drawbacks on various types of Nylon Tyres and other Tyres as set out therein.

In the meanwhile, by an order dated 8-9-1980 passed by the Assistant Collector of Customs, Amritsar, the claim of the petitioners for duty drawback in respect of their six export bills for the period February/march, 1979 was rejected on the ground that the claim was pending for a long time and it could not be kept pending indefinitely simply because the duty drawback rate had not been fixed by the Ministry. On receipt of this order the petitioners wrote a letter dated 11-9-1980 to the Deputy Secretary to the Government of India, Ministry of Finance, Department of Revenue drawing attention to the fact that the Assistant Collector of Customs, Amritsar closed their application for the claim of duty drawback in respect of exports to Pakistan during February/march, 1979 on the ground that duty drawback rates had not been fixed. They requested the Ministry to inform the Assistant Collector of Customs, Amritsar to keep their claims for drawback for the said period pending till the drawback rates were finalised.

Thereafter, on receipt of the above letter of 16-1-1981, fixing the drawback rates for the period 1-1-1979 to 31-3-1980, the petitioners wrote a letter dated 24-2-1981 to the Superintendent, Customs (DBK), Customs Division, Amritsar, requesting that their aforesaid six claims should now be decided in view of the duty drawback rates fixed by the Director (Drawbacks). The petitioners claimed accordingly a sum of Rs. 1,46,033.96.

The Assistant Collector of Customs, Amritsar, however, instead of finalising the claim of the petitioner wrote a letter dated 25-3-1981 stating that the claim of the petitioners in respect of these exports had been already rejected by him 8-8-1980 and informed the petitioners to file an appeal before the Appellate Tribunal. The petitioners accordingly filed an appeal which was dismissed on the ground that the appeal was time-barred. On the same ground, the revision application of the petitioners before the Government of India, Ministry of Finance was also rejected. hence, the petitioners have filed the present petition.

From the above facts it was quite clear that the petitioners were entitled to duty drawback in respect of six bills of export in connection with the export of Nylon Tyres made by them to Pakistan in the months of February and March, 1979. The duty drawback rates under Sections 74 and 75 are required to be fixed by taking into account the various factors which are set out in those sections. The rate of duty drawback was so fixed the period 1-1-1979 to 31-3-1980 only 6-1-1981. There is no material at all which would indicate that the petitioners were in any way responsible for this delay in fixing the rates of duty drawback. The petitioners, therefore, could not have claimed any duty drawback in respect of the exports effected by them in February/March, 1979 until the rates were so fixed by the Ministry of Finance. This was done only in January, 1981. Hence, the Assistant Collector of Customs was clearly wrong in rejecting the petitioners'' claim on 8-9- 1980 while rates of duty drawback were not fixed. He was bound to wait until the rates were so fixed before deciding the claims of the petitioners. The petitioners had immediately on 11-9-1980 written to the Finance Ministry protesting against this alleged rejection. The Assistant Collector of Customs, therefore, ought to have considered the claim of the petitioners as requested by them after the rates of duty drawback were so fixed. Instead of doing so, the Assistant Collector directed the petitioners at that late stage to file an appeal from his alleged order. This was clearly time-barred at that point of time. The revision application filed, was rejected on this technical ground. The entire proceedings to which the petitioners were driven by the Assistant Collector are totally misconceived. There is no dispute that on merits the petitioners are entitled to claim duty drawback. They have claimed such duty drawback by their letter dated 24-2-1981 which has submitted within less than 30 days of the fixing of the rates of duty drawback. In these circumstances, the petition is allowed and the rule is made absolute in terms of prayers (a) and (b). In view of the fact that the petitioners have been wrongly deprived of their claim and looking to the circumstances of the case, the respondents shall pay to the petitioners interest at the rate of 12% per annum from 10-4-1981 till payment. The petitioners made their application on 24-2-1981. After taking into account a reasonable time for disposing of the application, the date 1-4- 1981 is fixed. The above amount so payable shall, however, be verified by the respondents and only such amount as is found due and payable to the petitioners on the said bills shall be paid. Respondents to pay to the petitioners costs of the petition.