1979 (11) TMI 104 - HC - Customs

Summary

Issues:
1. Entitlement to drawback under the Customs Act and Rules.
2. Interpretation of Ext. P1 regarding prescribed drawback rates for tubes and flaps.
3. Application of Section 75 and relevant rules in determining drawback eligibility for exported goods.

Analysis:
1. The petitioner, a manufacturer of tubes and flaps, claimed drawback under the Customs Act and Rules for goods exported by them. The Assistant Collector initially denied the drawback, stating that no drawback was payable on non-dutiable goods. The Appellate Collector overturned this decision, but the Central Government in suo motu revision held that natural rubber used in manufacturing the goods was not dutiable, thus no drawback was payable. However, for goods with dutiable ingredients, the Assistant Collector was directed to reconsider and pass suitable orders.

2. The petitioner contested the denial of drawback, arguing that regardless of the dutiability of ingredients, they were entitled to drawback as per the rates specified in Ext. P1 for tubes and flaps. Ext. P1 prescribed specific rates for tubes and flaps, and the petitioner's counsel contended that all exported items attracted drawback based on these rates, irrespective of the dutiability of ingredients.

3. The judgment examined Section 75 of the Act, which allows drawback on goods manufactured in India and exported if duties were paid on imported materials used in manufacturing. Rule 2 defined drawback as a rebate of duty on imported or excisable materials. Rule 3 outlined the conditions for allowing drawback, including the reduction of drawback if only partial duty was paid on materials. The court concluded that since the petitioner's goods were made from non-dutiable natural rubber, the statutory provisions for drawback did not apply. Therefore, the rates specified in Ext. P1 were not applicable to the petitioner's goods, except for cases involving dutiable ingredients where duty had been paid.

In conclusion, the court dismissed the petition, ruling that the petitioner was not entitled to drawback as the exported goods were manufactured from non-dutiable natural rubber, making them ineligible for the prescribed rates under Ext. P1.