1982 (9) TMI 67 - HC - Customs

Summary

Issues Involved:
1. Entitlement to drawback on exported cotton sewing thread.
2. Compliance with procedural requirements for claiming drawback.
3. Validity and enforceability of the notification dated 8th April, 1975.
4. Timeliness of the claim for drawback.
5. Application of the Customs and Central Excise Duties Drawback Rules, 1971.

Detailed Analysis:

1. Entitlement to Drawback on Exported Cotton Sewing Thread:
The petitioner, M/s. Madura Coats Limited, exported cotton sewing thread between 28th June, 1973, and 26th March, 1974, and claimed a drawback as per a notification issued by the Government of India on 8th April, 1975, which fixed the rate at Rs. 2.34 per kg for exports made between 1st March, 1973, and 31st December, 1973. The court recognized that the notification had statutory sanction under Sections 75(1) and (2) of the Customs Act, 1962, thereby granting the petitioner a statutory right to claim the drawback.

2. Compliance with Procedural Requirements for Claiming Drawback:
The respondents argued that the petitioner did not comply with the procedural requirements, such as stating the claim for drawback at the time of export in the shipping bill and making a declaration regarding the duties paid. However, the court noted that the petitioner had made repeated representations and that the notification dated 8th April, 1975, was issued based on these representations. The court held that the procedural requirements should not disentitle the petitioner from claiming the drawback, especially since the notification had a statutory value.

3. Validity and Enforceability of the Notification Dated 8th April, 1975:
The respondents contended that the notification was not published in the official gazette and thus could not be enforced. The court rejected this argument, stating that the notification was within the powers conferred upon the Central Government by the Customs Act and the Customs and Central Excise Duties Drawback Rules, 1971. The court emphasized that the letter dated 8th April, 1975, gave the petitioner a statutory right to claim the drawback and did not require further notification in the official gazette.

4. Timeliness of the Claim for Drawback:
The respondents argued that the claims made by the petitioner were belated. The court, however, found that the petitioner had made the claim as soon as the notification was issued and had followed up with reminders. The court held that the delay in processing the claim by the Customs Department should not prejudice the petitioner's right to the drawback.

5. Application of the Customs and Central Excise Duties Drawback Rules, 1971:
The court examined the relevant provisions of the Customs Act and the Customs and Central Excise Duties Drawback Rules, 1971. It noted that item 27 of Schedule II of the Rules included "Made-up articles, garments, chiefly made from textile materials," which covered the cotton sewing thread exported by the petitioner. The court concluded that the petitioner's claim for drawback was valid under the Rules and that the letter dated 8th April, 1975, provided the necessary statutory basis for the claim.

Conclusion:
The court directed the respondents to pay the drawback dues to the petitioner as per the notification dated 8th April, 1975, after verifying the correctness of the amounts claimed. The rule nisi was made absolute in all the writ petitions except W.P. Nos. 2446 and 3070 of 1978, which were dismissed as superfluous. The court emphasized that the petitioner was entitled to the drawback as per the statutory provisions and the notification issued by the Government of India.