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Issues involved:
Challenge to order demanding duty payment u/s Customs Act based on non-use of imported bulk drug for manufacturing life-saving drug. Judgment Details: 1. Facts and Background: The petitioners imported bulk drug `Refampicin' for manufacturing `Rifampicin Capsules' under Customs Act exemptions. Due to market conditions, they decided to re-export the bulk drug to foreign suppliers. Customs allowed re-export without duty payment initially, but later demanded Rs. 22,99,044/- as duty due to non-use for manufacturing life-saving drugs. 2. Petitioners' Contentions: Petitioners argued they followed Customs advice to re-export, and Collector of Customs (Appeals) found in their favor in 1986. They offered to pay 2% duty as a gesture of goodwill, citing technical lapses and inability to obtain end use certificates. 3. Respondents' Arguments: Respondents contended that petitioners were obligated to obtain end use certificates after importing the bulk drug, and failure to do so justified the full duty payment of Rs. 22,99,044/-. 4. Court's Analysis: The Court found merit in petitioners' contentions, noting that Customs permitted re-export based on the same goods being imported and the technical nature of the lapses. The Court criticized the harsh approach of respondent No. 3 and supported petitioners' offer to pay 2% duty as per Customs Act provisions. 5. Judgment and Order: The Writ Petition was successful, directing the refund of excess amount deposited by petitioners and no costs were awarded. The Court emphasized that its decision was specific to the facts of this case. This judgment highlights the importance of considering the specific circumstances and technicalities involved in Customs matters, ensuring a fair and reasonable approach in duty-related disputes.
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