AD-I Banks Can Grant Extension For Export Drawback Claims; RBI's Direct Approval Not Mandatory: Kerala High Court
The Kerala High Court stated that AD-I banks authorized by RBI can grant extension for export drawback claims, RBI's direct approval not mandatory. Justice Ziyad Rahman A.A. stated that the Master Circular published in this regard indicates that it is not necessary that extension should come from the Reserve Bank of India itself as the AD-I bank are authorized to grant such...
The Kerala High Court stated that AD-I banks authorized by RBI can grant extension for export drawback claims, RBI's direct approval not mandatory.
Justice Ziyad Rahman A.A. stated that the Master Circular published in this regard indicates that it is not necessary that extension should come from the Reserve Bank of India itself as the AD-I bank are authorized to grant such extension.
In this case, the assessee/petitioner is engaged in the export of garments to various countries. The assessee has filed the petition, being aggrieved by order, by which the revision petition filed by the assessee against the order declining the drawbacks claimed by the assessee for the exports made by him by way of two shipping bill were declined.
The assessee exported certain items as per the shipping bills. The claim for drawback for the exports made as per the aforesaid shipping bills were declined by the Deputy Commissioner of Customs/3rd respondent.
As per the Deputy Commissioner of Customs the amounts were received by the assessee after the period stipulated under Section 75 of the Customs Act, 1962 read with Rule 16A of Central Customs and Excise Duties and Service Tax Drawback Rules, 1995.
Even though an appeal was filed challenging the said order, it culminated in order which was challenged in a revision petition. The same culminated in the impugned order.
The assessee submitted that the authorities rejected the claim of the assessee mainly under the impression that the extension of the time is required to be obtained from the Reserve Bank of India itself.
The assessee pointed out with specific reference to the Master Circular issued in this regard, that the extension can be made by the AD category I bank as well.
The department produced documents which are issued by the Directorate General of Foreign Trade, wherein, it is specifically mentioned that the date of realization of the money by the bank was on 13.06.2016 and there are no documents to establish that there was indeed an extension of time as permitted in Rule 16A either by the Reserve Bank of India or by the AD-I Bank.
The bench agreed with the assessee that even though Rule 16A specifically refers to the extension of the period by the RBI, the Master Circular published in this regard indicates that the RBI authorized the AD-I Banks to grant such extension for the purpose of claiming the benefit of drawback.
The bench stated that going by Master Circular, it is not necessary that extension should come from the Reserve Bank of India itself as the AD-I bank are authorized to grant such extension. Therefore, the question as to whether the receipt of the amount was based on extension as contemplated under Section 16A is a matter which requires to be considered.
In view of the above, the bench quashed the impugned order and directed the department to reconsider the claim of the assessee and take a fresh decision after considering all the documents.
Case Title: M/s Ginger Fashions Pvt. Ltd. v. Union of India
Case Number: WP(C) NO.5495 OF 2023
Citation: 2025 LiveLaw (Ker) 391
Counsel for Petitioner/ Assessee: M. Balagopal, R. Sreejith and R. Devika
Counsel for Respondent/ Department: P.R. Sreejith