Customs drawback on re-export of unused imported goods: Section 74 applies, with higher rate available absent actual use in India.

Identifiable duty-paid goods re-exported without actual use in India fall under Section 74 of the Customs Act, not Section 75, which applies to imported materials used in manufacture of exported goods. The note explains that where the imported Hydra-jack was never used because it could not be deployed at the site, the lower drawback rate for used goods was inapplicable. A shipping bill description stating the equipment "was to be used" was treated as substantial compliance with the declaration requirement, and the absence of Board regulations under Section 74(3) could not justify denial of the higher rate. Rule 11 of the 1971 Drawback Rules was held inapplicable in this context.

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Issues: Entitlement to customs drawback on re-export of the imported Hydra-jack, and whether the assessee was entitled to drawback at 98% or only 85%.

Analysis: The imported Hydra-jack was an identifiable article and was re-exported after importation; therefore, the governing provision was Section 74 of the Customs Act, not Section 75, which applies to imported materials used in the manufacture of exported goods. The notifications relied upon by the respondents provided for 85% drawback where the goods had been used in India, but on the facts the Hydra-jack had not in fact been used after importation because the statue could not reach the site for erection. The shipping bill description that the equipment "was to be used" was treated as substantial compliance with the declaration requirement, and the absence of Board regulations under Section 74(3) meant the respondents could not deny the higher rate on that basis. Rule 11 of the Customs & Central Excise Duties Drawback Rules, 1971 was held inapplicable because it was framed in the context of Section 75.

Conclusion: The assessee was entitled to drawback at 98% under Section 74(1) of the Customs Act, and only the balance 13% remained payable.

Ratio Decidendi: Where identifiable duty-paid goods are re-exported without actual use in India, drawback under Section 74(1) is payable at 98%, and a restrictive lower rate cannot be applied in the absence of the statutory basis required by the applicable regime.

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