2012 (8) TMI 726 - CGOVT - Customs

Drawback claim Held that - Goods were taken for reprocessing after re-importation and reprocessed goods exported cannot be said to be identified as re-imported goods - as per Notification No. 40/94-C.E. Drawback of duty under Section 74 of Customs Act, 1962 can not be allowed since the goods are exported in discharge of export obligation under DEEC Scheme - no infirmity in the impugned Order-in-Appeal - Revision Application is rejected

Summary

Issues involved:
- Duty drawback claim under Section 74 of the Customs Act, 1962 for re-exported goods.
- Rejection of duty drawback claim due to reprocessing of goods after re-importation.
- Denial of duty drawback claim for goods exported under DEEC Scheme.

Analysis:

Issue 1: Duty Drawback Claim under Section 74
The applicant, a leading manufacturer-exporter, re-exported 2100 Kgs of Hydroxy Propyl Methyl Cellulose Phthalate (HPMCP) under a duty drawback claim. The applicant contended that the goods were easily identifiable, as evidenced by the shipping bill and clearance by the proper officer for exportation under Section 74. The applicant argued that all conditions for duty drawback under Section 74(1) were met, entitling them to the claimed drawback amount.

Issue 2: Reprocessing of Goods
The lower authorities rejected the duty drawback claim on the grounds that the reprocessed goods exported could not be identified with the re-imported goods due to reprocessing. The applicant asserted that the reprocessing involved only filtration to remove carbon black particles, maintaining the identity of the product. The applicant emphasized that both old and new batch numbers were clearly documented in the export, ensuring traceability.

Issue 3: Denial under DEEC Scheme
The authorities also denied the duty drawback claim, citing export under the DEEC Scheme, which disallows duty drawback as per Notification No. 40/94-C.E. (N.T.). The applicant did not counter this finding. The Commissioner (Appeals) upheld the rejection, emphasizing the failure to establish the identity of re-exported goods with re-imported goods post-reprocessing.

Judgment:
Upon review, the Government upheld the rejection of the duty drawback claim, agreeing with the lower authorities' findings. The Government concurred that the re-exported goods' identity could not be established after reprocessing, failing to meet the statutory conditions of Section 74. Additionally, the export under the DEEC Scheme rendered duty drawback inadmissible. Consequently, the Revision Application was deemed devoid of merit and rejected.

This comprehensive analysis outlines the key arguments, findings, and the ultimate decision of the Government regarding the duty drawback claim and associated issues raised by the applicant.