Brand rate drawback: later CIF price revision cannot replace assessed import value when shipping bill value is lower.

For brand rate drawback fixation under the Drawback Rules, the export value shown in the shipping bill must be compared with the assessed value of imported materials used in manufacture. Where the shipping bill value is lower than the imported materials' value, Rule 8(2) bars admissibility. Later commercial settlement or renegotiation of the CIF price after import cannot replace the customs-assessed import value, because the revised figures were not approved by the assessing authority. The Board circular on calculating value addition on the basis of CIF value was treated as binding, so private price revisions could not override the statutory scheme or the import and export documents finalised by Customs.

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Issues: Whether, for fixation of brand rate drawback under the Drawback Rules, the importer could substitute the CIF value as renegotiated after import and rely on subsequent commercial settlement to show positive value addition, despite the shipping bill export value being lower than the value of imported materials.

Analysis: The applications for brand rate fixation were governed by Rule 6(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, and the bar in Rule 8(2) operated where the export value shown in the shipping bill was less than the value of imported materials used in manufacture. The valuation basis accepted by Customs in the bill of entry had not been reassessed, and the revised CIF figures based on later renegotiation had no approval from the assessing authority. The Board circular prescribing calculation of value addition on the basis of CIF value of imported materials was treated as binding, and subsequent private price revisions could not override the statutory scheme or the documents finalized at import and export.

Conclusion: The revised CIF value could not be substituted for the assessed import value, the condition in Rule 8(2) was not satisfied, and brand rate drawback was not admissible.

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