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of <h1>Court overturns duty drawback rate decision, emphasizes factual assessments for fair evaluations</h1> The court set aside the orders of the appellate and revisional authorities, directing a detailed examination by the appellate authority on the refund of ... Drawback on re-export of duty paid goods Issues:Refund of duty drawback at 98% under Section 74(1) of the Customs Act, 1962.Analysis:The petitioners sought a writ of mandamus for the refund of duty drawback at a rate of 98% under Section 74(1) of the Customs Act, 1962. The petitioners, engaged in manufacturing, imported a machine from Germany, which was found unsatisfactory for production. The machine's parts were imported in 1990 and re-exported in 1992 under a claim for supplementary drawback under Section 74. The petitioners argued that as the goods were not used during this period, they were entitled to the duty drawback at the rate of 98%. The appellate authority did not make a finding on the use of the goods, leading to a lack of clarity on the matter.The Revisional Authority opined that once goods are out of customs charge, it is impractical for customs authorities to determine if the goods were used or to what extent. However, the court highlighted that without following the procedure outlined in Section 74(2) of the Act, such conclusions would render the section meaningless. Section 74(2) empowers the Central Government to fix drawback rates for goods used post-importation based on factors like duration of use and depreciation. The court emphasized that a factual determination of whether the machine was used is crucial before granting benefits, and if evidence of non-use is presented, customs authorities must assess the extent of use to determine the benefit.Consequently, the court set aside the orders of the appellate and revisional authorities, directing a detailed examination of the matter by the appellate authority. The petition was allowed, and the appellate authority was instructed to decide within six weeks from the judgment date. The judgment emphasized the importance of factual assessments regarding the use of imported goods before granting duty drawbacks, ensuring a fair and thorough evaluation process in such cases.
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