Customs drawback is a class-based composite relief, not an automatic refund of exact duty paid by an importer-manufacturer.

Drawback under the Customs Act and the Drawback Rules is a class-based composite relief fixed on average trade conditions, not an automatic refund of the exact customs duty paid by an individual importer-manufacturer. Rule 3 contemplates a composite rate for classes of goods, and the prescribed rate was treated as valid because it reflected prevailing conditions, including domestic availability of DMT. Rule 6 did not support individual post-export relief on the facts, and Rule 7 could apply only where its conditions were met, which they were not. The claim for full drawback of customs duty on DMT was therefore rejected and the refusal to grant further relief was upheld.

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Issues: Whether the assessees were entitled to drawback of the customs duty paid on imported DMT used in the manufacture of export goods, and whether their claim could be sustained under the Drawback Rules on the footing that no drawback of customs duty had been determined for such material.

Analysis: The statutory scheme under Section 75 of the Customs Act, 1962 and Section 37 of the Central Excises and Salt Act, 1944 empowers the Government to frame drawback rules based on an average and composite assessment for classes of goods, not on the exact duty paid by an individual importer-manufacturer. Rule 3 of the Customs and Central Excise Duties Drawback Rules, 1971 contemplates fixation of a composite rate having regard to relevant duties and trade conditions. The rate prescribed for the goods in question was found to be a class rate fixed after taking into account the prevailing position, including the view that DMT was available indigenously, and it was not shown to be contrary to Rule 3. Rule 6 did not assist the assessees because it was inapplicable on the facts and was not the proper basis for claiming individual relief after export. Rule 7 alone could support further relief, but the conditions for such relief were not satisfied on the figures and findings accepted by the High Court.

Conclusion: The claim for full drawback of the customs duty on DMT was rejected, and the Government's refusal to grant the requested relief was upheld.

Ratio Decidendi: Drawback under the statutory scheme is a class-based composite relief determined on average trade conditions, not an automatic refund of the exact customs duty paid by an individual importer-manufacturer.

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