Sakthi Shoes Vs Commissioner of Customs (Madras High Court)
Summary: The Madras High Court allowed the writ petition filed by M/s. Sakthi Shoes challenging the order dated 18.06.2022 confirming recovery of duty drawback of Rs.3,51,500/- relating to seven shipping bills, together with applicable interest. The petitioner had exported shoes during the period from 2005 to 2010 and stated that its export business was closed in 2011 due to poor business activity. In 2018, a show cause notice was issued proposing recovery of the drawback on the allegation that proof of realisation of export proceeds had not been produced. The petitioner contended that the notice had not been served and that no opportunity of hearing had been provided before the impugned order was passed.
The principal issue considered by the High Court was whether recovery proceedings could validly be initiated more than seven years after payment of the last drawback in 2010. The Court noted that Rule 16 empowers Customs authorities to recover drawback erroneously or excessively paid but does not prescribe any limitation period. The Court held that, in the absence of an express limitation period, such statutory power must ordinarily be exercised within a reasonable period, depending upon the facts and circumstances of each case.
