IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.01.2010 CORAM: THE HONOURABLE MR.JUSTICE V.DHANAPALAN W.P.No.264 of 2009 M/s.Parmar Exports, No.210, Mint Street, Park Town, Chennai 600 003. ... Petitioner vs. The Assistant Commissioner of Customs (Drawback), Customs House, 60, Rajaji Salai, Chennai 600 001. ... Respondent Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of certiorarified mandamus to call for the records and quash the impugned order No.8056/2008 dated 18.08.2008 passed by the respondent and direct the respondent and to pass appropriate orders in accordance with the directions given by this court in W.P.Nos.5346 to 5352 of 2008 dated 25.04.2008. For Petitioner : Mr.S.Jaikumar For Respondent : Mr.P.Mahadevan, Senior Central Govt. Standing Counsel * * * * * O R D E R The order under challenge is passed by the Assistant Commissioner of Customs (Drawback), Chennai, wherein the Drawback claims made by the petitioner for seven Shipping Bills were suspended till the clearance for release of drawback amount or any other direction from the investigation agencies. 2. According to the petitioner, it is a partnership firm engaged in the export of Stainless Steel articles. The petitioner had filed 7 Shipping Bills for claim of drawback for Rs.9,86,263/- in terms of Customs, Central Excise Duties and Service Tax Draw Back Rules, 1995 read with Section 75 of the Customs Act, 1962. The respondent had kept the said drawback claim in abeyance without https://hcservices.ecourts.gov.in/hcservices/ processing the same on the grounds that the department had received a letter in F.No.INT/DGCEI/CHZU/88/2004 dated 06.10.2005 from the Directorate General of the Central Excise Intelligence (DGCEI), Chennai stating that the petitioner had effected fictitious exports and had fraudulently claimed duty drawback running into crores of rupees. As the subject drawback claims vis-a-vis the shipping bills were not the subject issue of the investigation, the petitioner had requested the respondent to process the said drawback claim and sanction the amount. As no response was received by the petitioner from the respondent, the petitioner had filed writ petitions before this court in W.P.Nos.5346 to 5352 of 2008. This court, by an order dated 25.04.2008 directed the respondent to pass appropriate orders within a period of four (4) weeks from the date of receipt of a copy of the order. 2a. While so, the respondent passed an order-in-original No.8056/2008 dated 18.08.2008, wherein the drawback claims for the above said seven shipping bills were suspended till the clearance for release of drawback amount or any other direction from the investigation agencies. Aggrieved by the said order, the petitioner is before this court. 3. The respondent has filed counter affidavit stating that the petitioner is an exporter of Stainless Steel articles and had filed 7 Shipping Bills, which were treated as original drawback claims. While processing the duty drawback claim submitted by the petitioner, the department had been alerted by the DGCEI vide Letter No.FNO.INT/CHZU/88/2004 dated 06.10.2005 that the petitioner has been indulging in malpractices to obtain more export incentive and thereby causing revenue loss to the Government exchequer. 3a. The respondent has further stated that malpractice cases are investigated by the Directorate General of Central Excise Intelligence (DGCEI), Coimbatore and that while conducting investigation against the exporters of Stainless Steel utensils, they had noticed that the exporters have effected fictitious exports and had fraudulently claimed duty drawback running into crores of rupees and they have adopted the same modus operandi and had operated at different ports. Hence, the Directorate has directed the respondent office to keep pending the drawback claims filed by some of the exporters, namely, M/s.Samy Metal Industries, M/s Ayyappan Industries, M/s.J.S.Babu Inc and M/s.Parmer Exports, the petitioner herein. Further, the Docks Intelligence Unit detected a Drawback offence during April 2006 in the name of M/s.Sunitha Metal Corporation & M/s.Ajay Exports, wherein, both the exporters admitted that they were only namesake exporters and the real owner of the companies was one Manish Jain, Proprietor of M/s.Parmer exports. Hence, the 7 Shipping Bills pertaining to the writ petitions referred to above were kept pending to safeguard revenue. This was intimated https://hcservices.ecourts.gov.in/hcservices/ to the exporter by raising query through online that 'Alert is pending'. 3b. It is also stated in the counter that since the petitioner holds that the drawback claim has no connection with the investigations that are being carried out by the DGCEI, the petitioner could have obtained an NOC from DGCEI and produced the same to this court. 4. Heard Mr.S.Jaikumar, learned counsel for the petitioner and Mr.P.Mahadevan, learned Senior Central Government Standing Counsel appearing for the respondent. 5. The foremost contention of the learned counsel for the petitioner is that the investigations carried out by DGCEI is not connected to the petitioner and the malpractices alleged to have been made by the petitioner are in no way connected to the bills claiming drawback. Therefore, the impugned order is not in accordance with law and even the appeal remedy as communicated in the impugned order cannot be an effective remedy to the petitioner. 6. On the other hand, learned Senior Central Government Standing Counsel appearing for the respondent would submit that the investigation by the Docks Intelligence Unit, DGCEI is still under progress and report is awaited from the investigation agencies. Therefore, at this point of time, if the drawback claim is admitted, then there may be loss to Government exchequer, which may prejudice the rights of the respondent. Learned counsel has also pointed out that in the impugned order itself, there is a clear indication that against the order impugned, an appeal would lie to the Commissioner (Appeals), Custom House, Chennai within 60 days from the date of receipt of the order. 7. I have considered the submissions made by the learned counsel on either side and perused the impugned order and the relevant materials placed before this court. 8. In this case, it is seen that the petitioner is a Partnership firm engaged in the export of Stainless Steel articles. In respect of 7 Shipping bills, the petitioner made drawback claims and they have been rejected by the respondent stating that the Department had received a letter from the DGCEI on 06.10.2005, stating that the exporter had effected fictitious exports and had fraudulently claimed duty drawback running into crores of rupees. In the impugned order, it is stated that all the seven claims were filed under Rule 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (hereinafter referred to as 'Rules') that is, they have claimed Drawback under All Industry Rate specified in the Drawback schedule. The eligibility of the Drawback claims are https://hcservices.ecourts.gov.in/hcservices/ subject to the verification of Bank Realization Certificate issued by the Foreign Exchange dealing Bank in favour of the exporter as per Rule 16 of the Rules. 9. It is understood from the impugned order that the petitioner has to submit the Bank Realisation Certificates for the drawback claim made in respect of 7 Shipping Bills. Therefore, the appropriate authority to deal with the claim of the petitioner has to give consideration to the claim of the petitioner after getting all the particulars from them. Though the claim of the petitioner is rejected by the respondent on the ground that investigation is under progress, it has been intimated to the petitioner that an appeal would lie against the order impugned and if the petitioner is aggrieved, they may prefer the same within 60 days from the date of receipt of a copy of the order. 10. In the counter affidavit, it is not clear as to whether the Intelligence Unit has completed the investigation and the report has been filed. But, it is seen that the original authority has passed the impugned order pending investigation of the matter by the Docks Intelligence Unit. It is clearly stated therein that the investigation by the Docks Intelligence Unit, DGCEI is still under progress and report is awaited from the investigation agencies. As it is vividly mentioned in the impugned order that the eligibility of the Drawback claims are subject to the verification of Bank Realisation Certificate issued by the Foreign Exchange dealing Bank in favour of the exporter as per Rule 16 of the Rules, the petitioner, in respect of his claim has to satisfy the requirements of the Department by submitting the Bank realization Certificate for the drawback claims made in respect of 7 Shipping Bills. 11. In the light of the above and considering the facts and circumstances of the case, this court is of the view that the authority competent to look into the grievance of the petitioner is the appellate authority and he shall look into the claim of the petitioner. When an appeal remedy is statutorily provided, it is the obligation on the part of the petitioner to prefer such an appeal, before approaching this court. Though the respondent has indicated in his order itself that an appeal would lie against the order impugned, without exhausting the appeal remedy, the petitioner has challenged the impugned proceedings before this court. Therefore, when an alternative remedy is effectively and efficaciously available to the petitioner, it is appropriate for them to exhaust such remedy as provided under the Rules. 12. Accordingly, the petitioner is directed to prefer an appeal to the appellate authority against the order impugned in this petition, within a period of four (4) weeks from the date of receipt of a copy of this order and on receipt of the same, the appellate https://hcservices.ecourts.gov.in/hcservices/ authority is directed to consider the appeal in accordance with law and on merits and dispose of the same within a period of six (6) weeks. It is made clear that the time taken during the pendency of the writ petition may be excluded, when the petitioner prefers an appeal. The writ petition is disposed of with the above direction. No costs. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. Abe To : The Assistant Commissioner of Customs (Drawback), Customs House, 60, Rajaji Salai, Chennai 600 001. 1 CC To Mr.P.Mahaadevan, Sr.C.GSC. SR.No.1958 Order in W.P.No.264 of 2009 KU (CO) SS (28.01.2010) https://hcservices.ecourts.gov.in/hcservices/