The Bombay High Court has quashed the order imposing harsh penalty for alleged wrongful availment of duty drawback by exporter and directed denovo consideration.

The Bench of Justice K.R. Shriram and Justice Jitendra S. Jain observed that the ground raised in the petitions are that the impugned order dated 30th November 2023 is an unreasoned order. 

The Petitioner/exporter has challenged the Order passed by Additional Commissioner of Customs (Export) imposing severe and harsh penalty of Rs.4,00,00,000 under Section 114(i) and 114AA under Customs Act, 1962 on the Petitioner for an alleged offence of wrongful availment of Duty Drawback amounting to Rs.4,65,946 by the Exporter.

The Respondent/departmnet has failed to provide any method and reasoning whatsoever to arrive at the said quantum in the Impugned Order. Therefore, applying the aforesaid principles, the Petitioner submits that the Impugned Order not only relies on irrelevant aspects but also lacks proper rational behind the findings made therein. 

Dr. Kantawala, Advocate for Petitioner submitted that the Respondent acted in an unreasonable manner and arbitrarily exercised his power without producing an iota of evidence to substantiate its finding in the impugned order. There is no finding by the Authority that Exports have not taken place or foreign remittance has not been received in India by the Exporter. 

Dr. Kantawala, Advocate for Petitioner submitted that even for a moment the court direct petitioners to exhaust the alternate remedy of filing an appeal, since the order is an unreasoned order, petitioners will not even know on what grounds their submissions were rejected.

Mr. Kantharia, Advocate for the Respondent tried his best to justify the order, in the end he had to throw in the towel because the impugned order spoke for itself. 

The court directed for denovo consideration of the matter with fresh personal hearings to be given to the Petitioners and the order to be passed by 30.11.2024. 

Case Details

Case Title:  Kailas Dhondibhau Argade V/s. The Union of India & Anr.

Case No.: Writ Petition (L) No.3429 Of 2024

Date: 09/09/2024

Counsel For Petitioner: Dr. Sujay Kantawala a/w Mr. Samsher Garud, Mr. Radheshyam Sharma, Ms.Mubasshira Qureshi and Ms. Dhwani Parekh i/b Jayakar & Partners 

Counsel For Respondent: Vijay Kantharia