Drawback eligibility for SKD exports: brand rate may be fixed despite a mistaken rule reference when substantive proof is on record.

Drawback claims for exports in SKD or unassembled condition are eligible for brand rate fixation where the governing circular permits such treatment and the exporter proves that the exported components constitute the complete export product. A claim should not be rejected merely because it was filed under the wrong rule if the substantive entitlement is otherwise established on the record. The circular is binding on departmental authorities, and the drawback scheme must be applied to neutralise export tax incidence rather than defeat benefit on a technical defect in the form of claim. The original authority was therefore directed to fix the brand rate of drawback in accordance with the rules and circular, subject to the prescribed revenue safeguards.

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Issues: Whether drawback benefit could be granted by treating the claim as one under Rule 7(1) of the Duty Drawback Rules, 1995 despite the application having been filed under Rule 6(1)(a), and whether export of goods in SKD condition remained eligible for brand rate fixation.

Analysis: The goods were exported in SKD/unassembled condition, and the circular governing drawback expressly states that goods exported in such condition are entitled to the All Industry Rate of drawback where available, and that brand rate of drawback is also admissible, subject to proof that the exported components constitute the complete export product. The circular is binding on departmental authorities, and the object of the drawback scheme is to neutralize the tax burden on exports rather than to deny substantive benefit on a technical mistake in the form of claim. The facts showed that the required inputs and export documents were already on record, and there was no dispute that the export product was complete in substance. The earlier rejection of the claim under Rule 6(1)(a) could not stand when the claim was otherwise fit for consideration under Rule 7(1).

Conclusion: The claim was held to be admissible under Rule 7(1), and the assessee succeeded.

Final Conclusion: The impugned orders were set aside and the original authority was directed to fix the brand rate of drawback in accordance with the drawback rules and the applicable circular, subject to the prescribed revenue safeguards.

Ratio Decidendi: A drawback claim should not be denied on a mere mistaken reference to the wrong rule where the substantive eligibility is established, and exports in SKD or unassembled condition remain eligible for brand rate fixation if the governing circular and evidentiary safeguards are satisfied.

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