1993 (10) TMI 105 - CGOVT - Customs

Appellate Authority Upholds Rejection of Drawback Claim for Importing Unauthorized Goods

The appellate authority upheld the rejection of the appeal concerning a drawback claim under sub-serial No. 2707 of the Drawback Schedule. The applicants ... Duty drawback Issues:- Rejection of drawback claim under sub-serial No. 2707 of the Drawback Schedule.- Interpretation of the lower authority regarding the availability of benefits under footnote (2) sub-serial 2707.- The exception to the general note 2(b) for payment of drawback under sub-serial No. 2707.- Disallowance of drawback due to the import of items other than those specified in the footnote.Analysis:The judgment deals with the rejection of two revision applications arising from an order passed by the Collector of Customs (Appeals), Madras, regarding the drawback claim under sub-serial No. 2707 of the Drawback Schedule. The original authority rejected the claim on the basis that certain inputs were imported duty-free under the DEEC Scheme, making the appellants ineligible for drawback as per general Note 2(b) to the Drawback Public Notice.The appellate authority upheld the rejection of the appeal, stating that additional benefits under footnote (2) of sub-serial 2707 were not available since the applicants had imported goods other than those specified, such as Zips, button/snap fasteners, and wadding. The revision application argued that the lower authority's interpretation was incorrect, emphasizing that the footnote allows a reduction in rates of drawback only for specific inputs like zips and buttons/snap fasteners, not a complete disallowance if other items are imported under the DEEC Scheme.The Government's analysis highlighted that while the general note 2(b) restricts drawback payment for goods exported under an advance license issued under the Duty exemption scheme, an exception is made under sub-serial No. 2707 for drawback availability if specified goods like zips and buttons/snap fasteners are imported duty-free without any other items permitted. The judgment clarified that if any additional goods are allowed for import, regardless of whether they are actually imported, drawback is not permitted. The use of 'not any other item' in the footnote emphasizes this restriction.Ultimately, the Government found no merit in the revision applications as the applicants had imported items beyond those specified in the footnote, leading to the rightful rejection of their drawback claims under sub-serial No. 2707. Consequently, both revision applications were rejected based on the interpretation of the Drawback Schedule and the specific requirements outlined in the footnote for eligibility for drawback benefits.