Texwin Impex Vs Assistant Commissioner of Customs (Madras High Court)
Madras High Court has set aside an ex parte order by the Assistant Commissioner of Customs that sought to recover duty drawback from exporter M/s Texwin Impex. The court found that the order was not a speaking order and violated principles of natural justice by failing to consider the company’s response to the show cause notice.
This marks the second legal challenge by Texwin Impex concerning a demand for recovery of drawback amounting to over Rs. 26 lakh, related to exports made between 2005 and 2016. The demand arose from allegations that export proceeds for these shipments had not been realised, a requirement for retaining drawback benefits. A show cause notice was issued in March 2017.
Texwin Impex claimed to have submitted a reply, including a certified ‘Negative Statement’ regarding fund realisation, in June 2017. However, an ex parte order confirming the demand, interest, and penalty was passed in April 2021 without apparent consideration of this reply.
The exporter initially had to approach the High Court in 2020 to obtain a copy of this order. Once furnished in 2022, the company filed the current petition challenging its legality.
Before the High Court, the petitioner argued that the order was unreasoned and passed in violation of natural justice. They highlighted that their reply and supporting statement were ignored. They also contended that the procedure for granting personal hearings, as per a CBEC Circular (No. 1053/02/2017-C.X.), requiring at least three opportunities with separate notices, was not followed. Reference was made to prior judgments, including Regent Overseas Private Limited (Gujarat HC) and M/s. M.L. Auto Enterprises (Madras HC), which had addressed similar procedural lapses in granting hearings.
