2011 (2) TMI 670 - CGOVT - Customs

Drawback claim - identity of the goods re-exported - The examination Report at the time of export of goods states that exported goods were Erythromycin Base USP/BP as per invoice and marks w.r.t. Bill of entry No. 2261/18-10-02 and establishment of identity is subjected to outcome of Test Report - Government observes that mere tallying the marks and nos. in export and import documents does not mean that the identity of actual contents of package is established - The Test Report has given the description of goods as Ammonium Chloride - So the goods exported vide Shipping Bill No. 6617 dated 23-6-2003 did not tally with the goods imported vide impugned Bill of Entry - As such, Government observes that the identity of the goods re-exported is not established as the same goods which were imported goods vide said Bill of Entry - Therefore, the Drawback claim was rightly rejected by the lower authorities.

Summary

Issues:
Claim for Drawback under Section 74 of the Customs Act, 1962 based on misdeclaration of goods.

Detailed Analysis:

Issue 1: Misdeclaration of Goods
The case involves M/s. Jubilant Organosys Ltd. importing a drug named "Erythromycin Base" which was later found to be Ammonium Chloride. The discrepancy was discovered after clearance, leading to a claim for Drawback under Section 74. The original authority rejected the claim due to misdeclaration. The applicant contended that they had informed the Customs department about the discrepancy and sought re-export for replacement. The Commissioner (Appeals) upheld the rejection, leading to the Revision Application before the Central Government.

Issue 2: Compliance with Drawback Provisions
The applicant argued that Drawback under Section 74 is applicable when goods are re-exported in the same condition as imported, with easily identifiable articles. They claimed that the goods were not used, in original packaging, and the identity could be established. The Commissioner (Appeals) was criticized for disallowing the claim without considering these factors.

Issue 3: Lack of Pre-clearance Sampling
The applicant highlighted that no samples were taken before clearance, and the discrepancy was discovered during quality checks. They emphasized internal records and supplier acknowledgment as evidence that the imported goods were wrongly labeled. The rejection and re-export were based on the discrepancy between the imported and exported goods.

Issue 4: Identity of Re-exported Goods
The applicant asserted that all export documents detailed the imported material, supplier information, and the rejection of goods for re-export under Drawback. They relied on a case law precedent to support their argument. However, the Central Government found that the identity of the re-exported goods as the originally imported goods was not established, leading to the rejection of the Drawback claim.

In conclusion, the Central Government upheld the Order-in-Appeal, stating that the applicant failed to establish the identity of the re-exported goods as the same imported goods, leading to the rejection of the Drawback claim under Section 74 of the Customs Act, 1962. The judgment emphasized the importance of accurate declaration and compliance with customs regulations in import-export transactions.