ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 17.12.2025
CESTAT Kolkata Overturns FSEZ Decision and Orders Revaluation of Duty Drawback Claimsβ
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.Β βββ βββ
In a significant development, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has delivered a favorable judgment for M/s Promising Exports Limited in two appeals concerning supplementary duty drawback claims. The appeals, numbered C/75607/2022 and C/75608/2022, were heard and decided on November 19, 2025, by a bench comprising Honβble Member Judicial and Honβble Member Technical.
Background of the Case
M/s Promising Exports Limited, a Kolkata-based company engaged in the export of garments, had supplied Men’s Cotton Knitted Vests and T-Shirts to a unit at Falta Special Economic Zone (FSEZ) under the Duty Drawback Scheme. β The company initially claimed duty drawback amounts of Rs. β 7,48,800/- and Rs. β 6,02,640/- for the vests and T-shirts, respectively. β However, only Rs. 6,52,464/- was sanctioned on March 31, 2004. β
Seeking revaluation of the drawback amount, the appellant approached the Development Commissioner, FSEZ, and subsequently filed a supplementary drawback claim on January 3, 2008, under Rule 15 of the Customs, Central Excise Duties & Service Tax Drawback Rules, 1995. β The claim was based on a revised valuation of the goods by the Apparel Export Promotion Council (AEPC), which indicated a lower per-piece value for the T-shirts. β
Despite reminders and legal interventions, the supplementary claim was rejected by the Development Commissioner, FSEZ, on December 12, 2017, citing it as time-barred under Rule 15(1) of the Drawback Rules, 1995. β This led the appellant to pursue legal remedies, including appeals before the Commissioner of Customs (Appeals) and writ petitions in the Honβble High Court of Calcutta. β
CESTAT Kolkataβs Decision
The tribunal observed that the cause of action for the supplementary claim arose only on October 5, 2007, when the AEPCβs revised valuation was communicated to the appellant. β Since the supplementary claim was filed on January 3, 2008, it was well within the three-month limitation period prescribed under Rule 15 of the Drawback Rules, 1995. β
The tribunal held that the rejection of the claim as time-barred was unsustainable and set aside the orders passed by the Development Commissioner, FSEZ. β It further directed the proper officer to reconsider the supplementary claims and sanction the eligible amount of drawback based on AEPCβs revaluation. β
Key Takeaways
- Timely Filing of Supplementary Claims: The tribunal clarified that the limitation period for filing supplementary claims begins from the date the cause of action arises, not the date of the original claim. β
- Importance of AEPC Valuation: The revised valuation by AEPC played a crucial role in determining the eligibility for additional duty drawback. β
- Legal Remedies for Exporters: The case highlights the importance of pursuing legal remedies when administrative decisions adversely affect exporters. β
Conclusion
The judgment is a significant win for M/s Promising Exports Limited and sets a precedent for similar cases involving supplementary duty drawback claims. It underscores the importance of adhering to procedural timelines and leveraging legal avenues to ensure justice. Exporters can take heart from this decision, knowing that the judiciary remains a robust mechanism for resolving disputes and protecting their rights.
Source: CESTAT Kolkata
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