9911796707
TMI Blog2022 (7) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, we are informed, as on date is unchanged. Petitioner was awarded a contract by Gas Authority of India Limited (GAIL) for the purpose of laying a pipeline for their project titled "Dahej-Vijapur Gas Pipeline". For undertaking the above project, petitioner imported various capital goods required for laying of the pipeline and these capital goods were imported through Mumbai/Nhava Sheva Ports during the period July 2003, November 2003 and January 2004. These capital goods were imported by petitioner on lease from one M/s. 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 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diced or not happy with the drawback being allowed, the only recourse available to the department is to file an appeal before the Commissioner (Appeals) against the order granting drawback. Petitioner also submitted that the demand notices are not maintainable in law. Respondent thereafter, filed an appeal before the Commissioner of Customs (Appeals) under Section 129D(4) of the said Act. Department's appeal was allowed by an order dated 20th October 2005. According to Commissioner of Customs (Appeals), granting of drawback 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Notification 27/02 has been paid; (i) in other words, there is no bar contained in Notification27/02 from claiming the drawback on re-export of goods. Similarly, no restriction has been imposed under the Drawback Rules or in Section 74 of the said Act that no drawback is available to petitioner as the goods were imported availing the benefit of Notification 27/02. Further, there is also no bar contained in Section 74 or in the Drawback Rules barring petitioner from claiming the benefit 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich Mr. Sridharan raised, this point is not an issue in as much as in our opinion what the department is claiming today is only return of the drawback amount paid to petitioner. Whatever amount has been paid to petitioner as drawback has to be paid back to the department in case the department succeeds. We do not wish to go into these hyper technical submissions of Mr. Sridharan. 11. Mr. Bangur submitted that Section 74 deals with drawback allowable on re-export of duty paid 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 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r relevant circumstances, may, by notification in the Official Gazette, fix. (3) The Central Government may make rules for the purpose of carrying out the provisions of this section and, in particular, such rules may- (a) provide for the manner in which the identity of goods imported in different consignments which are ordinarily stored together in bulk, may be established; (b) specify the goods which shall be deemed to be not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; (ii) in the case of goods which are reexported 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 V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) 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) goods which are re- exported after fifteen months, but within eighteen 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 forty per cent., of the aggregate of the duties of customs, which would be leviable under the Customs Act, 1962 or under any other law, read with any notification for the time being in force in respect of the duty so chargeable Note : The goods imported under this concession shall not be eligible for drawback under subsection (2) of section 74 of the Customs Act, 1962.". [No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 (1) of Section 74. What is the percentage of import duty to be paid as drawback can be found in Notification 19/1965. The table provides the percentage and the length of period between the date of clearance for home consumption and the date when the goods are placed under customs control for export. If it is not more than six months from the date of clearance for home consumption, then 85% and if it is more than six months but not more than 12 months, it is 70%. We are not going into the other rates as they are not applicable to the case at hand. The key words in the table are "from the date of clearance fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 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). Therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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