1992 (3) TMI 80 - HC - Customs

Drawback allowable on re-export of duty-paid defective machinery parts - Appellate and reversionary orders

Summary

Issues:
Claim for payment of export drawback, treatment of replacement machinery as fresh imports, refusal to pay export drawback, violation of Article 14 of the Constitution of India.

Analysis:
The writ petitioner sought payment of export drawback following an order by the Collector of Customs and subsequent revision by the Central Government. The petitioner imported an X-Ray machine from the USA for detecting impurities in molten iron. Upon finding defective components, the petitioner sent them back and received replacement machinery in three consignments, treated as fresh imports for duty payment.

The petitioner did not object to paying additional duty on replacement parts as it would offset with the export drawback on the defective machinery. Both the Collector of Customs and the Central Government accepted the procedure, acknowledging the petitioner's actions of sending back defective machinery and importing replacements. However, the claimed export drawback was not fully allowed, with values being altered in the bills.

Despite no opposition from the respondents and the absence of just cause, the respondents refused to pay the export drawback. The court held that under Article 14 of the Constitution of India, the respondents were obligated to honor the payment orders issued by the Collector of Customs and the Central Government. The court ordered the refund of the claimed sum to the petitioner promptly.

The court granted writs as prayed for in the petition, directing the respondents to refund the specified sum to the petitioner within a fortnight. Failure to do so would entitle the petitioner to take legal action. Interest at 18% p.a. was allowed if the principal sum was not cleared within the stipulated period. All parties were instructed to act on a xerox copy of the order duly countersigned by the Assistant Registrar.