Order date – 07 July 2022

Facts – 

• The Petitioner, Expotec International Ltd., is a public limited company engaged in the import and export of goods and services and is a recognized export house.
• At the time of importation of capital goods, petitioner had paid customs duty after availing benefit of Notification No.27/02-Cus dated 1st March 2002.
• Upon re-exporting these goods, petitioner claimed drawback under Section 74(2) of the Customs Act 1962 read with Notification No.19/1965 dated 6th February 1965. The petitioner were granted the drawback of Rs.9,04,190/- of customs duty paid on the capital goods re-exported.
• Thereafter, Petitioner received demand notices from respondent dated 11 July 2005, proposing to recover the drawback granted to petitioner.

Issue – 

• 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?

Order –

•  The Court observed that a drawback in relation to any goods exported out of India means the refund of duty paid on importation of such goods in terms of Section 74 of the said Act. Under Section 74, therefore, the expression “any duty that has been paid on importation” would mean 100% of the duty that was payable. 
• They also observed that the concession was given to the importer so they do not have to pay the entire 100% and then claim a drawback of 85% or 70%. Hence, those who fall under Notification 27/02 are not entitled to any drawback under Section 74.
• Petitioner would have been entitled to a drawback of either 85% or 70% depending on when the goods were re-exported, if they had paid 100% customs duty and not filed declarations under Notification 27/02. 
• Since petitioner had not paid 100% duty availing of Notification 27/02 and had already availed of concession as per Notification 27/02, petitioner is not entitled to any drawback and hence the appeal has been dismissed with costs in the sum of Rs.1 lakh.