2018 (10) TMI 577 - HC - Customs

Duty Drawback u/s 74 of the Customs Act, 1962 - the imported goods were sought to be exported - High Carbon Ferro Manganese Fines - claim of drawback was rejected by the Jurisdictional Assistant Commissioner on the ground that, the identity of the re-exported High Carbon Ferro Manganese Fines could not be established with the imported High Carbon Ferro Manganese Fines on the basis of the documents submitted at the time of the import and export. Held that - According to the petitioner, the export document shows that, the Manganese content is 68% minimum. With respect, the same itself will indicate that, the quality was not that, as imported. Moreover, the test reports which were sought to be relied upon at the behest of the petitioner before the adjudicating authority were disbelieved. The reasons for disbelieving the same have been stated by the authorities. It cannot be said that the impugned order suffers from the vice of perversity - petition dismissed.

Summary

Issues:
Claim for duty drawback under Section 74 of the Customs Act, 1962 based on the export of goods being rejected due to failure to establish identity with imported goods.

Analysis:
The petitioner imported High Carbon Ferro Manganese Fines from South Africa and subsequently exported the same to South Korea, claiming drawback under Section 74 of the Customs Act, 1962. The claim was rejected by the Jurisdictional Assistant Commissioner on the basis that the identity of the re-exported goods could not be established with the imported goods. The petitioner's appeal to the Commissioner (Appeals) was also rejected, leading to a revisional application. The revisional authority found that the first two conditions for the duty drawback claim were satisfied, but the third condition regarding the identification of exported goods with imported goods was not met.

The revisional authority emphasized that all three conditions needed to be fulfilled for the petitioner to be entitled to the duty drawback claim. The impugned order discussed the discrepancy in the Manganese content of the imported goods and the content declared in the export documents. The petitioner claimed a minimum Manganese content of 68% for export, while the imported goods had 72.09% Manganese. Additionally, test reports submitted by the petitioner were not accepted by the authorities, further weakening the claim for identity between the imported and exported goods.

The court found that the impugned order was not perverse, as the authorities had valid reasons for rejecting the duty drawback claim. The court dismissed the writ petition, stating that the quality discrepancy and the authorities' reasons for disbelief of the test reports were substantial grounds for upholding the rejection of the claim. No costs were awarded in the matter.

In conclusion, the judgment underscores the importance of establishing the identity of imported and exported goods for duty drawback claims under the Customs Act, 1962. The case highlights the significance of meeting all specified conditions for such claims and the necessity of providing credible evidence to support the claim of identity between the imported and exported goods.