Deemed export drawback requires genuine duty incidence and valid documents; promissory estoppel cannot sustain an illegal grant.

Deemed export duty drawback is available only where the claimant satisfies the Exim Policy conditions, including a valid claim basis and genuine supporting documents. The Delhi High Court record states that the petitioner had claimed the goods were imported and had suffered customs duty, but failed to substantiate that assertion despite opportunities, and the disclaimer certificates were doubted. Because drawback presupposes an actual incidence of duty, the legal fiction of deemed export could not be extended to create a benefit without the required factual and legal foundation. Promissory estoppel could not protect an illegal grant. The withdrawal of the drawback and the demand for refund were upheld.

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Issues: Whether the withdrawal of deemed export duty drawback already granted to an EOU and the consequent demand for refund were lawful, and whether the petitioner could rely on promissory estoppel or a broader construction of the export policy to retain the benefit.

Analysis: The entitlement to deemed export drawback under the Exim Policy depended on the policy conditions, including the production of a suitable disclaimer from the DTA supplier and a valid basis for the claim. The materials relied upon by the authorities showed that the petitioner had represented that the sesame seeds were imported and had suffered customs duty, but it failed to substantiate that assertion despite repeated opportunities. The record also raised serious doubts about the genuineness of the disclaimer certificates. The concept of drawback presupposes an actual incidence of duty, and the legal fiction of deemed export cannot be extended beyond its purpose to create a benefit where the factual and legal foundation is absent. In these circumstances, the authorities had relevant material to withdraw the benefit, and the plea of promissory estoppel could not operate against an illegal grant.

Conclusion: The withdrawal of the drawback benefit and the demand for refund were upheld, and the petitioner was held not entitled to retain the deemed export duty drawback.

Final Conclusion: The challenge to the recovery action failed because the petitioner could not establish lawful entitlement to drawback and the authorities were justified in correcting the earlier grant.

Ratio Decidendi: A legal fiction granting deemed export drawback cannot be extended beyond its statutory purpose, and drawback is admissible only where the underlying goods have suffered the requisite incidence of duty and the claimant satisfies the policy conditions with genuine supporting documents.

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