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Issues: Determination of duty drawback rate, application for drawback within prescribed period, rejection of application under Rule 15 of Drawback Rules.
Analysis: 1. Determination of Duty Drawback Rate: The petitioners exported cameras and were entitled to claim drawback of duty paid on the materials used in manufacturing them as per Customs Act and Drawback Rules. The rate of drawback for the respective item needed to be determined, and if not determined, manufacturers were required to apply to the Central Government under Rule 6 of the Drawback Rules. The petitioners made applications for some cameras within the prescribed period but not for all. Customs authorities later granted drawback for the entire quantity of exports but sought explanation for the delayed applications. 2. Application for Drawback within Prescribed Period: Customs authorities held that the drawback granted for cameras with delayed applications was time-barred, leading to a demand for refund. The petitioners then applied under Rule 15 of the Drawback Rules seeking relaxation of conditions to avoid denial of legitimate claims due to late application for determining the rate of drawback. However, their application was rejected by the Customs authorities, prompting the petitioners to challenge this decision through a petition. 3. Rejection of Application under Rule 15: The central issue in the case was whether the rejection of the petitioners' application under Rule 15 was justified. The rejection was based on the ground that the Ministry followed a policy of condoning delays only up to a certain period, and since the conditions of Rule 6 were not met, the application was declined. However, Rule 15 allows the Central Government to relax conditions to protect exporters' interests in cases of non-compliance due to reasons beyond their control. The Court found that the rejection solely on the grounds of non-compliance with Rule 6 was unjustified. 4. Court's Decision: The Court quashed and set aside the order rejecting the petitioners' application under Rule 15. The respondents were directed to re-hear the application on merits and pass appropriate orders after giving a personal hearing to the petitioners. The Central Government was instructed to dispose of the application expeditiously within six months. Until then, the respondents were barred from enforcing the previous order against the petitioners. The petition was disposed of with no costs, and the petitioners were required to maintain a bank guarantee until the resolution of the application under Rule 15 and an additional two months thereafter.
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