INDIA STEEL INDUSTRIES Vs. UNION OF INDIA
LAWS(BOM)-2017-10-162
HIGH COURT OF BOMBAY
Decided on October 13,2017

India Steel Industries Appellant
VERSUS
UNION OF INDIA Respondents

JUDGEMENT

Riyaz I. Chagla, J. - (1.)The Petitioners have filed this Writ Petition under Article 226 of the Constitution of India challenging order dated 23rd December 1992 passed by the first Respondent in a review application filed by the third Respondent under Section 129 DD of the Customs Act, 1962.
(2.)The short point which arises for determination in the present Writ Petition is whether the "Stainless Steel Bright Bars of Austenitic Variety" is classifiable as "Bright Steel Bars" for the purpose of drawback schedule under the Customs and Central Excise Duties Drawback Rules, 1972 (for short "the Rules") i.e. whether the same will go under sub serial No.3606 or 3803 of schedule 'F' of the Rules.
A brief background of facts in the present Petition is necessary.

(3.)The Petitioners are manufacturers of "Stainless Steel Articles" which conforms to the standards prescribed for grade AISI 304 of "Austenitic Variety". The Petitioners have exported between July to October 1988 various quantities of stainless steel bright bars of grade AISI 304. The Petitioners had filed drawback claim in respect of four shipping bills pertaining to the export effected between 6th June 1988 and 21st June 1988 for amount of Rs. 2,76,122/-. A public notice had been issued on 31st May 1988 by the Ministry of Finance, Government of India, Department of Revenue, wherein inter alia SS No. 3606 and 3803 were included under item Nos. 36 & 38 respectively in the duty drawback schedule of the Rules. The Respondents initially admitted the drawback claim of the Petitioners but by a letter dated 29th July 1988 paid a sum of Rs.12,254/- by classifying the exported goods under sub-serial No. 3606 rather than subserial No. 3803 to the said drawback schedule. The Petitioners filed supplementary claim on 6th September 1988 for balance amount to Rs. 2,63,868/- and filed detailed written submissions in support of the supplementary claims. The supplementary claims of the Petitioners initially came to be allowed on 1st March 1989 and the Petitioners received a balance claim of Rs.2,63,868/-. However, the new Assistant Collector (Drawback) issued a short levy notice dated 4th May 1989 and demanded Rs.2,63,868/- which had been paid to the Petitioners on the ground of erroneous payment. The Petitioners replied to the said notice and disputed the claim of the department that the goods exported would come under sub-serial No. 3606 rather than sub-serial No. 3803 to the drawback schedule. On 28th November 1989, the second Respondent directed the Petitioners to repay the amount of Rs.2,63,868/- by holding the goods to be classifiable under sub Serial No. 3606. A second claim of the Petitioners pertaining to export of goods under 11 shipping bills and for which the Petitioners were entitled to receive the drawback payment under sub-serial No. 3803 came to be rejected vide order dated 26th September 1988 on the ground that the goods are classifiable under serial No. 3606 and the claim is less than 2% of the FOB value of the goods. The claim was hit by the provisions under Rule 7A of the Rules. The third claim of the Petitioners regarding the export of gods under 9 shipping bills was rejected on 11th April 1990 on the same ground that the claim assessed under sub-serial No. 3606 was less than 2% of FOB value and therefore, hit by Rule 7A of the Rules. The Petitioners had filed Appeals against all three orders before the Collector (Appeals) and submitted that the goods are classifiable under sub-serial No. 3803 and not sub-serial No. 3606 of the schedule to the Rules and public Notice dated 31st May 1988 as the goods are "Stainless Steel Bright Bars of Austenitic Variety". The Collector (Appeals) vide order dated 25th September 1990 allowed the Appeal of the Petitioners by holding that the "Stainless Steel Bright Bars of Austenitic Variety" are classifiable under sub-serial No. 3803 and drawback should be allowed accordingly.


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