Bhati & Company Vs Union of India (Rajasthan High Court)
Summary: The Rajasthan High Court at Jodhpur allowed two connected writ petitions concerning recovery of excess duty drawback paid to exporters following misclassification of exported handicrafts and artistic wooden furniture. The principal petition was filed by M/s Bhati & Company in D.B. Civil Writ Petition No. 19673/2022, and the connected petition concerned Latiyal Handicrafts Pvt. Ltd. The common order was pronounced on 12.08.2026 by Hon’ble Mr. Justice Munnuri Laxman and Hon’ble Mrs. Justice Sangeeta Sharma.
In the case of M/s Bhati & Company, six shipping bills covering exports between 13.05.2011 and 20.05.2011 were involved, while Latiyal Handicrafts Pvt. Ltd. had exported under seven shipping bills commencing from 13.10.2009 to 25.05.2011. The petitioners had self-assessed the exported goods under Drawback Schedule Nos. 9401 and 940399. The respondents subsequently took the view that the appropriate classification was Drawback Schedule No. 442101. The resulting classification difference led to excess drawback payments.
The petitioners had carried out self-assessment under Section 17 of the Customs Act, 1962. Following an audit objection, show cause notices dated 25.03.2013 were issued seeking recovery of the alleged excess drawback by invoking Section 142(1) read with Section 75A of the Act and Rule 16 of the Customs and Central Excise Duties and Service Tax Drawback Rules, 1995. The original orders determining the excess drawback were challenged in appeal. The revisional authority subsequently set aside the original and appellate orders and remanded the matters for fresh consideration.
