Customs drawback is unavailable for exports made from non-dutiable inputs, even where a general rate is prescribed.

Drawback under Section 75 of the Customs Act applies only to exported goods manufactured in India from duty-paid imported or excisable materials, and the Drawback Rules confine entitlement to that statutory condition. Rule 3 reinforces that no drawback is available where the goods are produced from materials on which duty has not been paid. On the admitted facts, the exported tubes and flaps were made from natural rubber that was not dutiable at the relevant time, so the prescribed drawback rate could not override the statutory limits. The petitioner was therefore not entitled to drawback on the exports.

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Issues: Whether drawback under Section 75 of the Customs Act, 1962 and the Drawback Rules was payable on tubes and flaps exported by the petitioner when they were manufactured from natural rubber on which no duty had been paid.

Analysis: Section 75 empowers drawback only in respect of goods manufactured in India and exported where imported material or excisable material used in their manufacture is duty-bearing, and the rules likewise confine drawback to goods specified for such rebate. Rule 3 makes the allowance subject to the Customs Act and the Drawback Rules and expressly excludes drawback where the goods are produced or manufactured using imported materials or excisable materials in respect of which duties have not been paid. On the admitted facts, the petitioner's tubes and flaps were manufactured from natural rubber that was not dutiable at the relevant time. The prescribed rates in the public notice therefore could not operate independently of the statutory conditions governing entitlement.

Conclusion: The petitioner was not entitled to drawback on the exported goods manufactured from non-dutiable natural rubber, and the challenge failed.

Ratio Decidendi: Drawback under the Customs law is available only when the exported goods are manufactured from duty-paid materials and cannot be claimed merely because a general rate has been prescribed for the class of goods.

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