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TMI Blog2003 (9) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act and have also rejected duty drawback claimed under Section 74 of the Customs Act, the Petitioners have approached this Court by filing this Writ Petition. 2.The facts relevant for the present petition are that on 10th February, 1987 the Petitioner imported a Crankshaft machine from Germany and cleared the same on payment of duty of Rs. 2,27,871/-. Thereafter, the said Crankshaft, was found to be defective and the foreign supplier agreed to take back the machine and substitute it by a new one. The Petitioners on obtaining necessary permission from R.B.I., re-exported the said machine on 18th July, 1987. The new machine supplied in lieu of the defective machine arrived at Bombay sometime in January, 1988. On 25th January, 1988 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order dated 12th April, 1990 allowed the claim of the Petitioners, inter alia, on the ground that the petitioners had mentioned the S. No. of the crankshaft both in the Bill of Entry and the Shipping Bill, and therefore, the Customs authorities at the time of re-export must have satisfied that the goods exported were the same goods which were imported earlier. The Collector (A) held that the description of the goods and determination of the prevailing market value was not relevant in the present case, as the petitioners had obtained permission of the Reserve Bank of India for re-export with a condition to obtain free replacement within six months and that the said condition has been complied with by the petitioners. The order of Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined. He submitted that on the shipping bill, at the time of re-export, the petitioners had declared the market value at Rs. 1,10,000/- and if the duty of Rs. 2,27,871/- paid on the said Crankshaft at the time of import is taken into account, the market value of re-exported crankshaft would be much more than the drawback claimed and in that view of the matter, the duty drawback ought to have been granted to the petitioners. It was submitted that the drawback claimed by a party is to be on the basis of replacement value and not on this basis of export value. Mr. Sanklecha, submitted that the Government of India was in error in denying the benefit of drawback on the technical ground that the shipping bill filed by the petitioners was not a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs have not challenged the rejection of the refund claim made under Section 27 of the Customs Act. The reliefs sought in this petition pertains to the validity of Section 76 of the Customs Act and the denial of duty drawback under Section 74 of the Customs Act. Therefore, granting refund of duty under Section 27 of the Customs Act does not arise in this petition. 9.As regards the duty drawback is concerned under the Customs Act, to avail duty drawback, it is necessary to export the goods on a drawback shipping bill as per the procedure prescribed. In the present case, admittedly the machinery was not re-exported under the drawback shipping bills but the same was re-exported under a free shipping bill. If the machinery was exported under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an never be higher than the C.I.F. value. In the present case, the duty paid on the imported goods was two times more than the C.I.F. value. Therefore, it is inconceivable that the market value of a totally defective machine could be higher than the drawback of duty which is more than the C.I.F. value. In any event, as the market value of the exported machine was not declared/determined in the present case, the drawback of duty could not be granted. If the price of Rs. 1,10,000/- declared on the free shipping bill is to be accepted as market price of a defective machine, then it being less than the duty drawback allowable, under Section 76 of the Customs Act, drawback could not be granted. The contention of the petitioners that the duty pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound to be defective which needed replacement and the entire X-ray machine was not defective. Moreover, in that case, the Customs authorities on re-export of certain components of X-ray machine had granted drawback but at a lesser rate. In that context it was held by the learned Single Judge of the Calcutta High Court that the petitioners therein are entitled to higher amount of duty drawback. Thus the above decision of the Calcutta is distinguishable on facts of the present case. Apart from that, in the light of the decision of the Apex Court in the case of Om Prakash Bhatia (supra), the findings given in the decision of the Calcutta High Court that the value of replacement parts for charge of import duty should be treated as value for cal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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