2012 (10) TMI 272 - CGOVT - Customs

Drawback claim re-export - Held that - Applicant imported Injection Mould EPAS 14 way (9622) with associated accessories at concessional rate of duty under EPCG Scheme, which was re-exported - applicant as importer cleared the goods at concessional rate of duty under EPCG Scheme on execution of Bond, imposing upon themselves the obligation to pay duty along with interest in case they failed to fulfil condition of the Notification. The applicant after importation found their goods defective and paid the differential duty along with interest before re-export of the goods - as the applicant paid the whole duty along with interest, they are eligible for drawback under Section 74 of the Customs Act, 1962

Summary

Issues:
- Denial of Drawback claim due to non-payment of full import duty at the time of importation under EPCG Scheme.

Detailed Analysis:
1. The Revision Application was filed against the Order-in-Appeal rejecting the Drawback claim by M/s. FCI OEN Connectors Ltd. The case involved the re-export of injection mould with accessories imported under EPCG license. The original authority rejected the Drawback claim citing non-payment of full import duty as required under Section 74 of the Customs Act, 1962.

2. The Applicant appealed against the Order-in-Original, which was also rejected by the Commissioner (Appeal). The Revision Application was then filed before the Central Government under Section 129DD of the Customs Act, 1962, on the grounds that the rejection of the Drawback claim would cause irreparable loss and hardship to the Applicant.

3. The Applicant argued that they had complied with all procedural requirements for claiming Drawback as per the Re-export of Imported Goods Rules, 1995. It was contended that the duty was paid subsequently, along with interest, before re-exporting the goods, making them eligible for the Drawback claim. The Applicant emphasized that the full duty was paid before re-export, fulfilling the necessary condition for claiming Drawback.

4. The Central Government, after reviewing the case records, noted that the Applicant had imported goods under the EPCG Scheme at a concessional rate of duty, with an obligation to pay the full duty along with interest if the conditions of the scheme were not met. The Applicant paid the differential duty and interest before re-exporting the defective goods, which the Government considered as duty paid at the time of importation.

5. The Government concluded that since the Applicant had paid the full duty along with interest, they were eligible for the Drawback under Section 74 of the Customs Act, 1962. The order rejecting the Drawback claim was set aside, and the original authority was directed to sanction the Drawback to the Applicant in accordance with the law.

6. The Revision Application was disposed of in favor of the Applicant, allowing them to claim the Drawback as per the decision of the Central Government.