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TMI Blog1987 (4) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... heets. A certain quantity of the goods were purchased by petitioners at Rs. 51.00 per kg. Petitioners utilised the sheets for manufacture of utensils and exported the finished product. The Central Government, acting under rule 3 of the aforementioned Rules, had fixed 80 paise per kg.as the drawback rate. Pleading that the same was far low, petitioner pleaded for a raise under rule 7. The .plea was accepted and the rate raised to Rs. 60.30 and Rs. 60.80 per kg. on two different lots exported. At a later date, the Government reduced the drawback-rate to Rs. 44.85 per kg. The reason given for the slashing was that the price paid to the MMTC was below even the landed cost. Petitioner's protests not having yielded a result, it challenges the red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined under Rule 7 and whether the price paid to the importer by the exporter was of no relevance to the subject? 6. A look into the relevant provisions of the rules is instructive. The rules have been framed under the rule making power conferred upon the Central Government by Section 75 of Customs Act, 1962, (C. Act) and Section 37 of the Central Excises and Salt Act, 1944 (CESTA). Drawback is defined in Rule 2(a) as "the rebate of duty chargeable on any imported materials................... used in the manufacture of such goods in India". Rule 3 makes drawback determinable by the Central Government, subject to the C. Act, CESTA and also the rules. Two factors to be taken into consideration for determining the amount or rate of draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of customs chargeable on imported materials, where the materials have been used for manufacture and export of finished goods. The drawback is to be in accordance with and subject to the rules made under sub-section (2). Sub-section (2) enables the Central Government to make rules for various purposes and sub-rule (a) thereof lays down that the rules may provide - "for the payment of drawback equal to the amount of duty actually paid on the imported materials used in the manufacture of the goods or as is specified in the rules as the average amount of duty paid on the materials of that class or description used in the manufacture of.................." 7. This would show that the drawback has an inseverable connection with duties of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The rules provide for a scheme of drawback and not a cash subsidy or incentive to exporters. The two operate in distinct and different spheres. Therefore, when the price is less than the duty paid, that factor cannot be ignored. 8. It was next argued that the rate of Rs. 60.30/Rs. 60.80 had been fixed after a verification, and, that in any case there was no provision for a review thereof. This contention is at variance with the amplitude of the power conferred under rule 14. That power can be invoked where the amount so paid is the result of an error or in excess of the claimant's entitlement. That there can be a demand for repayment of a drawback paid wrongly or in excess of the entitlement, presupposes the existence of a power to rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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