11. Supplementary Claim of Duty Drawback or Revision/Appeal in Drawback Cases

1. Supplementary Claim

The Rule

Rule 15(1) of the Drawback Rules, 1995 (See Part 2 on Act, Rules, Notifications and Circulars) provides for filing a Supplementary claim ‘where an exporter finds that the amount of drawback paid to him is less than what he is entitled to on the basis of the amount or rate of drawback determined by the Central Govt.’

Supplementary Claim or Appeal

There can be two situations calling for filing a claim or appeal. These are-

1. the drawback sanctioned is less than the amount claimed

2.allother cases than covered by 1 above.

Suo Moto Action

Under Section 129DD(4) of the Customs Act 1962, suo moto review proceedings can be initiated by the Govt. and formal applications for revision transformed to suo moto action.

Supplementary claim can be filed in all cases other than those where the amount Sanctioned is less than the amount claimed i.e. situation two above. Moreover, Supplementary Drawback Claim under Rule 13 of Drawback Rules, 1971 (i.e. Rule 15 of Drawback Rules, 1995) can be filed only in case of goods exported under Sec. 75 of the Customs Act, 1962. Hence, no supplementary claim can be filed on goods which are re-exported under Sec. 74 of the Customs Act.

Appeal can be filed in situation where the amount sanctioned is less than the amount claimed i.e. situation 1 above.

Appellate Authority

The appeals are to be filed to the Commissioner of Customs (Appeals) in the concerned Customs House. In such cases, Supplementary claims would not be entertained.

Claim Authority

Supplementary Claims are to be filed with the concerned Customs Commissionerate, which settled the original claim.

Supplementary Claim on the basis of Date of Payment of Original Drawback Claim

“Under rule 15(1) of the Drawback Rules, 1995 an exporer can file a Supplementary claim for drawback only when he finds that ‘the amount of drawback paid on him is less than what he is entitled to on the basis of the amount paid or drawback determined by the Govt.’ Because of non-payment or settlement of the original claims, proviso (iii) to rule 15(1) should be applied for setting the supplementary drawback claims. Otherwise, the decision in announcing the Brand rate is meaningless and nullified. Moreover, proviso (ii) to Rule 15 would sub-serve proviso (iii). Hence, supplementary claims should be decided on the basis of date of payment of the original drawback claims”, observed the Revisionary Authority in Hindustan Lever Case.

Time Limit

The exporter should prefer supplementary claim within a period of 3 months where-

(i) the rate of drawback is determined or revised under Rule 3 or Rule 4 of Drawback Rules, from the date of publication of such rate in the official gazette.

(ii) the rate of drawback is determined or revised upward under Rule 6 or 7 of the Drawback Rules, from the date of communication of the said rate to the person concerned,

(iii) in all other cases, from the date of first payment or settlement of the original drawback claim by the proper officer.

Relaxation. The aforesaid period of three months may be extended by –

(a) the Asstt. Commissioner of Customs, by a further period of three months, and

(b) the Commissioner of Customs, by a further period of nine months.

On being satisfied that the exporter was prevented by sufficient cause from filing his supplementary claim within the aforesaid period of three months.

Date of Export

The amount of drawback due is worked due is worked out at the prescribed rate for the exported goods and prevailing on the date of ‘Let Export Order’ given by the Customs on Drawback Shipping Bill, etc.

Claim Form and Documents

The form of application for supplementary claim is at Annexure 27. Send it along with:

(i) Brand rate letter under Rule 6 or 7
(ii) Calculation sheet for amount of drawback claimed
(iii) Documents is support of supplementary claim
(iv) Documents prescribed by Customs like at Bombay or Moradabad (see below).

Instructions

While filing supplementary claims, take care of the following ‘general’ points and those for claims relating to Bombay Customs.

General

(i) Where the supplementary claim arises on account of revision of rates with retrospective effect, or pursuant to an order in appeal/order in revision, a copy of the letter/notification of the Min. of Finance authorising such rates or copy of the order in appeal/revision, as the case may be, should be enclosed.
(ii) Give such explanations/statements and/or reasons as may be necessary for filing/setting the supplementary claim.
(iii) Give cheque No. and its date by which drawback has been received against original claim.
(iv) State clearly as to whether claim relates to exports made by air or sea.

Procedure at Mumbai

Also send following documents along with the claim application.

(i) Invoice copy;
(ii) Bill of lading copy;
(iii) Brand rate letter, if any;
(iv) Shipping bill (copy of exporter’s copy);

Where an exporter’s copy of shipping bill is not available the application shall be accompanied with a photo copy of shipping bill together with an affidavit that he has not preferred any supplementary claim. The said affidavit shall also show-

(a) shipping bill number, and
(b) amount of drawback originally paid

Where the exporter has its original copy but does not wish to part with it, he shall submit a photo copy of the same along with its original copy. The original copy will be returned to him after comparing.

Claim Reference Number. If the supplementary claim is found in order it shall be given a claim Reference Number by the Drawback Deptt. Which shall be quoted in all future correspondence.

Procedure at Moradabad

Supplementary and/or provisional claims of drawback may also be lodged/filed with the Assistant Commissioner (ICD), Central Excise Pakwara, Moradabad.

Such claim should be sent along with,

(i) Shipping Bill
(ii) Invoices
(iii) Packing List
(iv) Bill of Lading
(v) Bank certificate
(vi) Declarations

Attestation

The copies of the above-mentioned documents to be submitted along with the supplementary claim, should be duly attested by the Appraiser/Superintendent of Customs (ICD), Moradabad.

No Fresh Token

On receipt of the supplementary claim in the Drawback Cell, no fresh token No. will be issued and the same will be attached with the original claims.

Separate Cheques

After processing, if the claim is found admissible, it will be sanctioned and a separate cheque will be issued.

Date of Filing

The date of filing of the supplementary claim for the purpose of payment of interest on delay in payment under Section 75A of the Customs Act shall be the date of affixing the dated receipt stamp on such claims which are complete in all respects and for which an acknowledgement shall be issued.

Deficiency Memo

Claims which are not complete in all respects or are not accompanied by the required documents shall be returned to the exporter with a ‘deficiency memo’ within 15 days of submission and shall be deemed not to have been filed.

Where the exporter complies with requirements specified in the deficiency memo with 30 days from its date of receipt the same shall be treated as a claim filed under sub-rule (1) of Rule 15.

Interest

Claims not settled within 3 months of the date of receipt, will be eligible for interest at the rate of 15% per annum.

Repayment

The amount of drawback and interest, if any, paid erroneously or is in excess of what the claimant is entitled to, is to be refunded on receipt of demand from the concerned authority. Any delay in refund will be liable to payment of 20% interest per annum.

2. Appeal in Drawback Cases

Appeal Cases

An appeal can be filed in cases where drawback claim sanctioned is less than the amount claimed. It is to be filed with the Commissioner of Appeals (Customs) against an order passed by an officer lower in rank than a Commissioner.

Time Limit

An appeal under Sec. 128 of the Customs Act is to be filed within three months from the date of communication of the order against which an appeal is preferred.

Relaxation. The period of filing an appeal can be extended by 3 months, if sufficient cause is shown for the delay.

Form of Appeal

An appeal under Sec. 128(1) of the Customs Act, 1962 is to be made in form CA-1 (Annexure 28), in duplicate. The grounds of Appeal and the form of verification in form CA-1 shall be signed.

Documents

An appeal should be accompanied by a copy of the decision or order appealed against.

Fee

A nominal fee under the Court Fees Act is to be paid in the form of court fee stamps as per the rates prescribed by State Govt. where the Commissioner (Appeal) concerned is located.

3. Revision to Commissioner (Appeals)

A revision against the order of Commissioner lies with the Commissioner (Appeals), under Sec. 129D(4) of the Customs Act, 1962. It should be sent in form CA 2 (Annexure 29) in duplicate and accompanied by two copies of the decision or order passed by the adjudication authority (one of which at least shall be a certified apply to copy) and a copy of the order passed by the Commissioner direction the authority to Commissioner (Appeals).

4. Revision to Central Govt.

A revision against an order passed by Commissioner (Appeals) and/or the Commissioner of Customs lies with the Central Govt. under Sec. 129DD of the Customs Act, 1962. It should be sent in form CA.8 (Annexure 30), in duplicate, and accompanied by an equal number of copies of the following documents: -

(i) order passed by the Commissioner of Customs (Appeals) under Sec. 128A of the Customs Act, 1962.

(ii) Decision or order passed by the Customs Officer which was the subject matter of the order referred to in (i).

It should be sent to:

The Under Secretary (Revision Application)
Ministry of Finance
(Deptt. Of Revenue)
Central Secretariat
(North Block)
New Delhi-110 001

5. CEGAT (Tribunal) Jurisdiction

The CEGAT i.e. Customs, Excise, Gold Control Act Tribunal has no jurisdiction in drawback cases.

6. No Supplementary Claim under Rule 13 (New Rule 15)

The new Drawback Rule 15 (old Rule 13) is on supplementary claim. The Govt. of India (Revisionary Authority) has ruled, after taking into consideration harmonious interpretation of Sec. 75 of Customs Act read with Drawback Rules, that the claim for supplementary drawback envisaged in Rule 13 (new Rule 15) of Drawback Rules can be Filed in respect of goods exported under Sec. 75 only and not for the goods exported under Sec. 74. Hence, the supplementary claim can be filed for export and not re-export.