Independent relaxation under drawback rules cannot be refused mechanically for non-compliance with brand rate procedure

Rule 15 of the Customs and Central Excise Drawback Rules, 1971 operates as an independent, beneficial relaxation power where an exporter is otherwise entitled to drawback but has failed to comply with procedural requirements for reasons beyond control. Rule 6 sets out the procedure and time-limit for claiming determination of brand rate, while Section 75 of the Customs Act, 1962 and the Drawback Rules create the substantive entitlement to drawback. An application under Rule 15 cannot be rejected mechanically merely because Rule 6 was not complied with; the competent authority must consider the request on its merits. The rejection was therefore unsustainable and required fresh consideration.

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Issues: Whether the Central Government was justified in rejecting the application for relaxation under Rule 15 of the Customs and Central Excise Drawback Rules, 1971 merely because the conditions prescribed under Rule 6 had not been complied with.

Analysis: Section 75 of the Customs Act, 1962 and the Drawback Rules create the entitlement to drawback, while Rule 6 prescribes the procedure and time-limit for seeking determination of brand rate where the rate is not already fixed. Rule 15 confers a separate enabling power on the Central Government to relax conditions and exempt an exporter from non-compliance where the failure is for reasons beyond control and the exporter is otherwise entitled to drawback. That power is beneficial in character and is meant to prevent denial of legitimate drawback on technical grounds. The rejection of the application only on the ground that Rule 6 was not complied with did not amount to an exercise of the discretion vested under Rule 15.

Conclusion: The rejection under Rule 15 was unsustainable and was set aside; the matter was remitted for fresh consideration on merits.

Ratio Decidendi: Rule 15 is an independent discretionary provision enabling relaxation of drawback conditions, and an application under it cannot be rejected mechanically solely for non-compliance with Rule 6.

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