2012 (12) TMI 439 - HC - Customs

Re-export the goods - drawback claim alleged that shipping bills had been filed, inadvertently, under Section 75 of the Customs Act, 1962, instead of filing the claim, under Section 74 of the said Act Held that - in case of re-export of goods imported under the DEPB scheme, the Boards Circular No. 75/2000-Cus., dated 11-9-2000, specifies certain conditions, according to which the re-export of the imported goods are allowed only if the goods are found to be unfit for use because of certain manufacturing defects. Further, the goods in question are to be re-exported within a period of six months from the date of import, and the identity of the goods has to be established to the satisfaction of the customs authorities concerned. While so, it is not in dispute that the goods had been re-exported by the petitioner, as they did not find any suitable buyer. As such, it cannot be said that the goods were defective in nature. Further, the petitioner had not adhered to the other relevant provisions of the Customs Act, 1962. As such, it is clear that the petitioner would not be eligible for drawback, under Section 74 of the Customs Act, 1962, in respect of 5000 kilograms of goods, as their batch numbers did not match with the bills of entry cited by the petitioner. It is also seen, from the shipping bills, invoices, packing list and the examination report, that the fact of export of imported goods had not been declared by the petitioner and the shipping bills had not been filed, under Section 74 of the Customs Act, 1962 - petitioner is not entitled to drawback

Issues Involved:
1. Eligibility for drawback under Section 74 vs. Section 75 of the Customs Act, 1962.
2. Procedural compliance for claiming drawback.
3. Re-export conditions under the DEPB scheme.
4. Verification and documentation requirements for drawback claims.

Detailed Analysis:

1. Eligibility for Drawback under Section 74 vs. Section 75 of the Customs Act, 1962:
The petitioner firm mistakenly filed shipping bills under Section 75 instead of Section 74 of the Customs Act, 1962. Section 75 pertains to goods that have undergone processing, whereas Section 74 applies to goods re-exported in their original form. The appellate authority allowed the drawback for 8,000 kilograms but disallowed it for 5,000 kilograms due to mismatched batch numbers. The Revision Authority upheld this decision, noting the petitioner failed to comply with the statutory conditions and procedures laid down in Section 74 and the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995.

2. Procedural Compliance for Claiming Drawback:
The petitioner firm did not fulfill the procedural requirements for claiming drawback under Section 74. The shipping bills were incorrectly filed under Section 75, which necessitates a different verification process. Consequently, the customs authorities could not carry out the necessary verification, including taking samples for testing. The petitioner's failure to file the relevant documents under Section 74 led to the rejection of their drawback claim for 5,000 kilograms of Metronidazole.

3. Re-export Conditions under the DEPB Scheme:
The Board's Circular No. 75/2000-Cus., dated 11-9-2000, specifies that re-export under the DEPB scheme is allowed only if the goods are found unfit for use due to manufacturing defects. The petitioner re-exported the goods because they could not find a suitable buyer, not due to defects. Thus, the conditions for re-export under the DEPB scheme were not met, further justifying the rejection of the drawback claim.

4. Verification and Documentation Requirements for Drawback Claims:
The petitioner did not adhere to the necessary verification and documentation requirements. The shipping bills, invoices, packing list, and examination report did not declare the fact of re-export of imported goods under Section 74. This lack of proper documentation and failure to establish the identity of the goods to the satisfaction of the customs authorities led to the dismissal of the petitioner's claim.

Conclusion:
The High Court dismissed the writ petition, affirming that the petitioner is not entitled to the reliefs prayed for due to non-compliance with statutory requirements and procedural lapses. The court emphasized the importance of adhering to the correct legal provisions and procedures for claiming drawbacks under the Customs Act, 1962. The connected miscellaneous petition was also closed with no costs.

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