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TMI Blog2022 (7) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... en so much of the duty of customs as in excess of 30%. In these cases, there is no importation for home consumption envisaged under Section 74. This is a separate class of importers and the Notification 27/02 has been issued under Section 25(1) of the said Act and not under Section 74. There is a duty exemption as provided in Notification 27/02 for those who import machinery or tools for execution of a contract and re-export the same within the prescribed period. This concession was given because the Central Government was satisfied that it was necessary in the public interest so to do, where the importer has taken the goods on lease for use after importation and at the time of importation makes a declaration that the goods are being imported temporarily for execution of a contract. Such conclusions are not prescribed under Section 74 or notification issued under Section 74(2) - the concession given to such importer was that he need not pay the entire 100% of the customs duty payable under the said Act but would pay only 15% or 30%, as the case may be, They do not have to pay the entire 100% and then claim a drawback of 85% or 70%, as the case may be. Notification 27/02 is is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Matts European Pipeline Rental, BV, Holland and JSC Krasnodargazstroy, Russia. At the time of importation, petitioner had paid customs duty of Rs.57,17,488.20 after availing benefit of Notification No.27/02-Cus dated 1st March 2002 (hereinafter referred to as Notification 27/02). 3. Upon completion of the project/contract awarded by GAIL, petitioner re-exported the capital goods under various shipping bills during the period February and April 2004. The fact that petitioner had imported availing benefit of Notification 27/02 or has re-exported these capital goods is not disputed. Upon re-exporting these goods, petitioner claimed drawback under Section 74(2) of the Customs Act 1962 (the said Act) read with Notification No.19/1965 dated 6th February 1965 as amended by Notification No.154/1969-Cus dated 8th November 1969 and Notification No.45/1970-Cus dated 2nd May 1970 (hereinafter referred to as Notification 19/1965). The drawback claimed was the customs duty that petitioner had paid on importation. All requisite documents mentioned in the Re-Export of Imported Goods (Drawback of Customs Duties) Rules 1985 (hereinafter referred to as Drawback Rules) was submitted to claim the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck under Section 74 of the said Act at the time of re-export was contrary to the exemption notification and, therefore, the department was justified in calling upon petitioner to return the drawback amount claimed by and paid to petitioner. 6. Impugning this order dated 20th October 2005, petitioner filed a revision application under Section 129DD of the said Act. The revision application came to be rejected by an order dated 5th September 2006. 7. There were lot of things that happened in between, that petitioner s goods were detained and petitioner approached this Court by way of a separate writ etc., which we need not go into at this stage. The short question that is required to be decided by this Court is whether petitioner was entitled to any drawback on the customs duty that they had paid, under Section 74 of the said Act read with Notification 27/02 read with Notification 19/1965 read with Notification No.27/2008-Cus dated 1st March 2008 (hereinafter referred to as Notification 27/2008) amending Notification 27/02. 8. Mr. Sridharan submitted as under : (a) the object of the Government of India is to reimburse all the duties, levies and taxes paid on the export g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Notification 27/02 on the goods imported, which were re-exported under claim for drawback. Hence, in the absence of any bar or restriction contained in the Notification 27/02 or in the Drawback Rules, the action of the department is totally not sustainable; (j) the above submission is also supported by the conditions imposed by the Government in Notification Nos.241/82-Cus, 72/94-Cus, 11/97-Cus (Sl. No.124) and 21/02-Cus (Sl. Nos.261 and 280). These notifications grant concessional rate of customs duty on goods exported and re-imported on the condition that at the time of export no drawback should be availed. No such conditions has been prescribed in Notification 27/02 with which we are concerned. (k) the reason advanced by the department is also ex-facie untenable if the reasoning is tested in another way. Assume that for any reason the importer is unable to re-export the machinery within a period of one year. In such a case the concession of 15%/30% of the aggregate of the duties of customs will be denied and the normal duty applicable on the import of the machinery would be demanded. If, thereafter, the machinery is re-exported within the period specified under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, i.e., duty that has been paid on importation. If 100% duty had been paid at the time of importation of the capital goods and within six months of its importation or between six months and one year, the goods have been re-exported, then the importer would be entitled to a drawback of either 85% or 70% of the customs duty paid. Mr. Bangur submitted that such a situation will arise only where the party has paid the entire 100% duty. Mr. Bangur further submitted that the exemption granted under Notification 27/02 is only in cases where the party, at the time of importation had imported with an intention of re-export within six months or between six months and one year and in such a case, the Government decided not to saddle the importer by making the importer pay the 100% but only the percentage which he would not get as drawback. If the importer has availed of this Notification 27/02 and only paid the duty that would be payable if the goods were re-exported, then such a party is not entitled to any drawback. Mr. Bangur also submitted that the Notification 27/2008, in which there is a footnote that the goods imported under this concession shall not be eligible for drawback was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capable of being easily identified; and (c) provide for the manner and the time within which a claim for payment of drawback is to be filed.] (4) For the purposes of this section- (a) goods shall be deemed to have been entered for export on the date with reference to which the rate of duty is calculated under section 16; (b) in the case of goods assessed to duty provisionally under section 18, the date of payment of the provisional duty shall be deemed to be the date of payment of duty. 13. Notification 27/02 reads as under : Notification : 27/2002-Cus. dated 01-Mar-2002 Leased machinery, temporary import of - Scheme of exemption In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (1) of the Table annexed hereto, from the payment of so much of the customs duty leviable thereon as is specified in column (3) of the said Table, subject to the limitations and conditions specified in column (2) thereof, namely: - TABLE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after six months, but within one year, of the date of importation, so much of the duty of customs as is in excess of the amount calculated at the rate of thirty per cent. of the aggregate of the duties of customs, which would be leviable under the said Customs Act, 1962 or under any other law for the time being in force, read with any notification for the time being in force in respect of the duty so chargeable. [Notification No. 27/2002-Cus., dated 1-3-2002] 14. Notification 19/1965 issued pursuant to and in exercise of the powers conferred by sub-section 2 of Section 74 of the said Act reads as under : NOTIFICATIONS UNDER SECTION 74 GOODS NOT EASILY IDENTIFIABLE Gum Arabic, Gum Benjamin etc. not easily identifiable. - In exercise of the powers conferred by section 49, clause (a), of the Sea Customs Act, 1878 (8 of 1878), the Governor General-in-Council is pleased to declare that Gum Arabic, Gum Benjamin, Gum Olibannum or Frankincense shall not, for the purpose of Chapter VI of the said Act, be deemed capable of being easily identified. [G. of I. Notification No. 1117, dated 10th June, 1881.] Drawback rates in respect of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a motor car or goods (other than the goods specified in the second proviso to that paragraph), imported by a person for his personal and private use, drawback of duty shall be calculated by reducing the import duty paid in respect of such motor car or goods by 4%, 3%, 2/% and 2% for use for each quarter or part thereof during the period of first year, second year, third year and fourth year respectively : Provided that where the period aforesaid is more than 2 years, drawback shall be allowed, only if the Board, on sufficient cause being shown, has in that particular case extended the period beyond 2 years : Provided further that no drawback shall be allowed if such motor car or goods has or have been used for more than 4 years. [M.F. (D.R.) Notification No. 19-Cus., dated 6th February, 1965 as amended by Notifications No. 154-Cus., dated 8th November, 1969 and No. 45-Cus., dated 2nd May, 1970.] 15. Notification 27/2008 reads as under : Notification : 27/2008-Cus. dated 01-Mar-2008 Machinery, equipment and tools - Exemption to temporary import of leased goods - Amendment to Notification No. 27/2002-Cus. In exercise of the powers conferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the date on which the d in full, if the re-export does not take place within the stipulated period In the case of (i) goods which are reexported within three months of the date of import, so much of the duty of customs as is in excess of the amount calculated at the rate of five per cent.; (ii) goods which are reexported after three months, but within six months, of the date of import, so much of the duty of customs as is in excess of the amount calculated at the rate of fifteen per cent.; (iii) goods which are reexported after six months, but within nine months, of the date of import, so much of the duty of customs as is in excess of the amount calculated at the rate of twenty-five per cent.; (iv) goods which are reexported after nine months, but within twelve months, of the date of import, so much of the duty of customs as is in excess of the amount calculated at the rate of thirty per cent.; (v) goods which are reexported after twelve months, but within fifteen months, of the date of import, so much of the duty of customs as is in excess of the amount calculated at the rate of thirty-five per cent.; (vi) go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are re-exported. To claim the drawback, there are only three conditions that are required to be complied with, viz., (a) the goods which have been imported into India should be capable of being easily identified; (b) any duty has been paid on such importation; and (c) such goods are entered for export and the proper officer permits clearance and loading of the goods for exportation under Section 51 (we are not concerned with clause (ii) and clause (iii) of subsection (1) of Section 74 in the case at hand) and in such cases, 98% of such duty shall be repaid as drawback except as otherwise in the section provided. Such duty indicates the duty leviable under the Act. If the goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs as the goods that were imported and the goods are entered for export within two years from the date of payment of duty on the importation thereof, drawback on such duty can be obtained. 19. Sub-section 2 of Section 74 determines the rate of drawback in the case of goods which have been used after the importation but those goods also have to comply with the conditions mentioned in sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The extent of exemption is so much of the duty of customs as in excess of 15% (incase re-exported within six months) and if beyond six months but under one year then so much of the duty of customs as in excess of 30%. In these cases, there is no importation for home consumption envisaged under Section 74. This is a separate class of importers and the Notification 27/02 has been issued under Section 25(1) of the said Act and not under Section 74. Section 25 provides for power to grant exemption from duty and sub-section (1) of Section 25 reads as under : 25. Power to grant exemption from duty. - (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. There is a duty exemption as provided in Notification 27/02 for those who import machinery or tools for execution of a contract and re-export the same within the prescribed period. This c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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