2013 (11) TMI 498 - CGOVT - Customs

Rejection of drawback claim - Import of old and used machinery and equipments/accessories spare parts on re-export basis - Contravention of provisions of Notification No. 23/2008-Cus., dated 1-3-2008 - Time frame of re export of goods - re-exported the imported goods after a period of 18 months - Held that - applicant re-exported the goods after 19 to 23 months and filed claim of drawback under Section 74 - At the time of export only one notification was in existence i.e. 23/2008-Cus, dated 1-3-2008 which in force. The drawback of duty on said re-exported goods can be sanctioned in accordance with the Notification No. 23/2008-Cus. which was applicable on the date of re-export - As per Notification 23/2008-Cus. goods cleared for re-export after 18 months of their import into India attract nil rate of drawback and as such no drawback can be allowed. Applicability of Chapter 1A of Foreign Trade Policy (F.T.P.) 2004-2009 - Held that - drawback is a export promotion scheme, which specifically governed under Sections 74 and 75 of the Customs Act, 1962 and rules/notifications issued thereunder. As such, legal framework of FTP cannot be automatically made applicable to provisions of the Customs Act, 1962. Moreover the said legal framework of FTP Policy para 1.4 Chapter 1A, refers to notifications or public notices issued by DGFT - Therefore, there is no infirmity in order in appeal - Decided against assessee.

Summary

Issues:
1. Drawback claim rejection based on re-export timing.
2. Application of Notification No. 23/2008-Cus. retrospectively.
3. Doctrine of promissory estoppel application.
4. Applicability of Foreign Trade Policy (F.T.P.) to Customs Act.
5. Legal framework governing drawback claims.
6. Relevance of case laws in the current case.

Issue 1: Drawback claim rejection based on re-export timing
The case involves the rejection of a drawback claim by the Assistant Commissioner of Customs (DBK) due to the re-export of imported goods after 18 months, contrary to the provisions of Notification No. 23/2008-Cus. The Commissioner of Customs (Appeals) upheld this decision, leading to a Revision Application filed by the applicant. The applicant argued that the re-export was delayed due to project completion expectations within 18 to 24 months, as per Section 74 of the Customs Act, 1962.

Issue 2: Application of Notification No. 23/2008-Cus. retrospectively
The applicant contended that the amendments made under Notification No. 23/2008-Cus. should not be applied retroactively to goods imported prior to its issuance. However, the government observed that the notification was applicable at the time of re-export and determined the rate of drawback based on the duration of use and relevant circumstances.

Issue 3: Doctrine of promissory estoppel application
The applicant invoked the doctrine of promissory estoppel, arguing that changes in the policy framework should not disadvantage importers who relied on previous promises. The government, however, found no legal basis to apply this doctrine in the current case, as the amendments were made within the legal framework of the Customs Act.

Issue 4: Applicability of Foreign Trade Policy (F.T.P.) to Customs Act
The applicant claimed that their drawback claim was admissible under Chapter 1A of the Foreign Trade Policy (F.T.P.) 2004-2009. However, the government clarified that the legal framework of the F.T.P. does not automatically apply to the Customs Act provisions governing drawback claims.

Issue 5: Legal framework governing drawback claims
The government highlighted Section 74(2) of the Customs Act, 1962, which empowers the Central Government to fix drawback rates based on various factors. The amendments in Notification No. 23/2008-Cus. regulated the drawback rates applicable at the time of re-export, determining the admissibility of the applicant's claim.

Issue 6: Relevance of case laws in the current case
The applicant cited various case laws to support their arguments, emphasizing the application of principles like promissory estoppel. However, the government found that the facts of those cases were distinct from the current scenario, making the application of those judgments irrelevant.

In conclusion, the Revision Application was rejected by the government, upholding the decisions of the lower authorities regarding the rejection of the drawback claim based on the timing of re-export and the applicability of Notification No. 23/2008-Cus. on the case. The legal framework of the Customs Act governed the admissibility of the claim, and the application of the F.T.P. provisions was deemed inapplicable.